Life-style orientation of rural US and Canadian consumers

Are regio-centric standardized marketing strategies feasible?

The Authors

Talha Harcar, Department of Business Administration, Pennsylvania State University at Beaver, Monaca, Pennsylvania, USA

Erdener Kaynak, School of Business Administration, Pennsylvania State University at Harrisburg, Middletown, Pennsylvania, USA

Abstract

Purpose – In view of the existing void in the current international and cross-national/cultural marketing literature, the purpose of this paper is to look into the similarities and differences of life-style orientations prevalent among US and Canadian consumers. The AIO (Activities, Interest, and Opinions) and VALS (Values, Attitudes, and Life-Styles) statements adapted from the current cross-cultural marketing literature were utilized to determine different US and Canadian consumer market segments. The research tools and techniques used in this study help retail businesses as well as manufacturing companies of the two countries to develop and execute more effective target marketing strategies.

Design/methodology/approach – The data for this study were collected through self-administered questionnaires. The questionnaires were administered in two different locations. First, in Brandon, Canada and second, in the rural part of south central Pennsylvania (York and Lancaster counties). Both regions are similar to each other, each having a flourishing agricultural industry and a significant number of companies in the service and manufacturing industries. The data were collected through a drop-off and pick-up method among a sample of 300 Canadian married or common-law families and 400 in the USA.

Findings – The study results show that there are, indeed, differences among the consumers’ life-styles in the two countries which were similar in demographics and as such may have been previously treated the same way by marketers, but in reality have very different lifestyles. Based on the survey findings, managerial and/or public policy implications are offered for orderly marketing decision-making purposes.

Research limitations/implications – A study of total urban consumers may produce different life-style profiles than the ones presented here. This study only examined North American consumer life-styles within the framework of product group (form). Additional studies may look at consumer life-styles by use of product brands and even product options.

Originality/value – This empirical research study presents cross-cultural comparisons of life-styles, value orientations of consumers in the purchase of a variety of goods and services in the similar environments of North America, namely rural areas of the USA and Canada.

Article Type:

Research paper

Keyword(s):

Marketing strategy; United States of America; Canada; Consumer behaviour; Life-styles; Rural areas.

Journal:

Asia Pacific Journal of Marketing and Logistics

Volume:

Number:

Year:

2008

pp:

433-454

Copyright ©

Emerald Group Publishing Limited

ISSN:

1355-5855

Introduction

Culture instills in individuals norms, values and life-styles that influence every characteristic of their behavior as consumers. World cultures are set apart based on the relative importance or ranking of values and life-styles; that is, values and life-styles are not held to the same degree by everyone, regardless of culture. Consequently, the identification of cultural values and life-styles could have important implications for marketing strategy decisions (Spielvogel, 1989). Another important characteristic of values and life-styles is that they are derived from and personalized through social and cultural learning and identify consumer demographics (i.e. age, occupation), as the personal factors influencing consumer behavior. Thus, a scrutiny of the relationship between consumer demographics and values and life-styles is likely to provide marketing managers with valuable insights for market segmentation, value creation, product positioning/re-positioning, and promotional decisions (Manrai and Manrai, 1996; Kahle, 1999, 2003).

Research background

Prevailing consumer life-styles and the resultant actions in a country indicate how consumers live, think, behave, and act. This, in most cases, is determined by consumers’ demographic background, experiences, socio-economic characteristics, behavioral tendencies, and current situation or action. These proto-typing attempts to paint a more realistic multi-dimensional portrait of a consumer that represents a sub-segment for a particular product/brand. It suggests answers to the deeper motivations and aspirations behind the purchase and consumption of a product and service (Wansink, 2000).

Since its early introduction by Lazer in 1963, consumer life-style analysis information has become a very popular tool in marketing management decision making. Segmentation using attitudinal and behavioral measures as bases was the most popular segmentation development in the 1990s (Piirto, 1990). Within this approach, consumers who hold similar beliefs, attitudes or preferences within a particular category are grouped together (Honkanen et al., 2004). The use of values and life-styles as segmentation criteria is continuously increasing in the hope that it explains more observed consumer behavioral/action variation than pure demographic and/or socio-economic variables. Because consumer values and life-style characteristics do provide a richer view of the market and a more life-like portrait of the consumer, they meet the demands of management practice for increasingly sophisticated and actionable marketing information (Wagner and Weddle, 1995).

Past cross-cultural consumer studies showed that there are discernible life-style segments that cut across cultures and transnational borders (Kahle, 1999). Although cultural differences would exist, individuals pursuing similar life-styles in different cultures may be responsive to similar product features and advertising and promotion themes. A study of Schwartz and Bardi (2001) showed that values are mostly consistent across different cultures. As such, this would justify for the construct of “value” as being a valid measure for life-style segmentation across cultures. If this is the case, marketers can then develop cross-cultural/national marketing strategies around these identifiable market segments.

One of the popular global segmentations by life-style has been developed by the advertising agency Backer Spielvogel Bates Worldwide (BSBW). The company used its Global Scan program to survey consumers in 18 different countries, mostly located in the TRIAD nations of North America, Western Europe, and Asia-Pacific. BSBW's scan has identified five distinct global life-styles which is a helpful tool for identifying consumer similarities across national boundaries. Through this global scan the researchers were able to study consumer attitudes and values, media viewership/readership, buying/consumption patterns, and product/brand use (Boote, 1982-1983). Another survey discovered an important difference in the same life-style segment in different countries in relation to their car purchases (Piirto, 1990). It was suggested that the Porsche automobile company uses the emerging life-style profiles to develop advertising tailored to each life-style type. Additional studies in this field focused on European buying habits in order to determine if it is feasible to segment Euro consumers in the same life-style segments (Hill, 1997).

In an effort to differentiate their product/service offerings, global companies pay closer attention to the growing global market segment that is expected to drive the market forward within the new millennium. It is proposed that new globalization waves will create success for those who make an effort to stay abreast of life-style shifts. On the other hand, some researchers report that people in each nation still have a lot of idiosyncrasies that make life-style segmentation across borders more challenging and demanding (Latham, 1993).

In the past, geographic regions have been used as a basis for market segmentation, with the understanding that values and life-style influences on consumption and purchasing may differ across geographical areas (Kahle, 1999). Based on existing consumer behavior and life-style analysis literature, a study was undertaken to explain changing North American values and life-styles in the twenty-first century as well as their marketing policy implications. The purpose of the study is to compare consumer behavior patterns and value orientations in the respective countries/regions as well as across national borders. The underlying assumption here is that geographic regions may have a sufficient level of within-region homogeneity and between-region heterogeneity which could provide a sound basis for geographically-based market segmentation strategies (Kahle, 1986).

In the current study we use the term “life-style” to express general attitudes or feelings associated with individuals’ general interests, opinions, and activities, within their socio-cultural environments. This includes aspects of respondents’ shopping habits, attitudes towards families, health care, household chores and social activities. This approach is in accordance with the traditional way of considering life-style as a more general construct than specific product-related perceptions, preferences, or attitudes (Grunert et al., 1997).

Consumer values and life-style

Past studies examined values and value systems at the macro rather than micro level. In his seminal works Rokeach (1973, 1979) suggested that the terminal and instrumental values of a society may be uncovered at five different levels: through a content analysis; through an assessment of the values espoused by members of a society; assessing the values of persons aspiring to membership in a society; through gatekeepers’ perceptions of societal values; through a clientele's perceptions of societal, institutional, or organizational values. A decade later, Rokeach and Ball-Rokeach (1989) added a sixth method of measuring macro-level values among a random or representative samples of respondents within a nation. This type of a study allows researchers to extend the analyses from the individual to the societal level analysis, to ascertain the extent to which the value priorities of a whole society are remaining stable or undergoing change over time, and to monitor in various segments of society whose values are remaining stable or undergoing change, and finally directly compare values and value priorities across cultures and societies. Studies conducted by Schwartz (1992, 1994) compare values in one country with those of others. The value profiles of nations show characteristic patterns and each of these patterns differs meaningfully from the others. It was further stated that the prevailing value variations are linked to different individual experiences, behavior and attitudes of people across societies. As such, values are considered as the criterion that individuals in a society use to select and justify their consumption related behaviors and to value objects and behavioral tendencies and the resultant actions of others (Fraj and Martinez, 2006, p. 134). One can conclude by stating that there may be potential relationships between consumer life-styles and values or value systems.

It was suggested that consumers’ life-style is a function of inherent individual characteristics that are shaped and formed through social interaction as consumers move through the family life-cycle (Hawkins et. al., 1998). As such, life-style schemes aim at classifying consumers into identifiable market segments with specific life-style patterns, on the basis of numerous scales assessing AIO's (Activities, Interest, and Opinions) and VAL's (Values, Attitudes, and Life-styles) of consumer groups.

It was also stated that a life-style marketing (psychographics) perspective recognizes that people classify themselves into groups on the basis of the things they like to do, how they like to spend their leisure time, the type of interest they have, and how they choose to spend their disposable income (Benjamin and Rosabeth, 1976). These predispositions, in turn, determine distinct consumer profiles. As a result, consumer life-styles are measured by asking consumers about their activities (work, hobbies, and vocations), interests (family, job, and community) and opinions (about themselves, others, and about social issues, politics, business). These AIO questions, in some studies, are of a very general nature; in others at least some of the questions are related to specific products/services (Peter and Olsen, 2005). For standardized mass consumption products, general types of AIO statements are utilized, whereas for differentiated products/services specific product/service related questions are asked. The differences in consumer behavior establish opportunities for product differentiation and market segmentation strategies that recognize the potency of a consumer's chosen life-style. Through this kind of an approach, one can determine both the type of products and the specific brands more likely to appeal to a designated life-style segment profile (Solomon et al., 1999).

Life-style segmentation, in most cases, follows a post-hoc model. This is explained in the way of consumers first being asked questions about their life-styles and then being grouped on the basis of the similarity of their responses (Peter and Donnelley, 2004). Life-style research conducted for large populations is rather extensive and expensive, and as a result, this field has been developed to a large extent by commercial market research companies. The most popular application of general life-style pattern is SRI International's VALS program (Fox, 1985). VALS provides a systematic classification of American adults into several distinct value and life-style patterns (Values, Attitudes, and Life-Styles Program). This program reflects a real-world pattern that explains the relationship between personality traits and consumer behavior. In general, VALS uses psychology to analyze the dynamics underlying consumer preferences and choices. VALS not only distinguishes differences in motivation, it also captures the psychological and material constraints on consumer behavior that may show cross-cultural/national variations.

Another popular life-style segmentation theory was developed by Claritas, a leading firm in the market segmentation industry (Morgan, 1993). The company used geo-demographic analysis and incorporated extensive data on consumption patterns. The output called Prizm system is a set of 62 life-style clusters organized into 12 broad social groups. Life-style segmentation is based on the idea that the more you know and understand about consumers, the more effectively you can communicate and market to them. The underlying assumption here is that consumers express their personalities through their behaviors. People with different personalities exhibit different behaviors or similar behaviors for different reasons.

Besides the general pattern of life-style patterns, many companies have performed life-style studies focused on consumer and household life-styles that are most appropriate to the products and services they are selling. A recent study by the sporting industry, for instance, focused on women's clothing preferences as a category-based approach to life-styles, and found they are affected more by life-style than by age (Sporting Goods Business, 2001). This illustrates how consumer and household life-styles to specific product categories and services have created new marketing concepts such as life-style marketing, life-style retailing, and life-style merchandising, which have increasingly dominated how retailers approach a product, its display in a retail store, and its promotion. This has had a powerful impact on how companies build their marketing plans and strategies (Duff, 2001). Life-style retailing can be described as the policy of tailoring a retail offer, or a portfolio of retail offers, closely to the life-styles of specific market segments (Blackwell and Talarzyk, 1983). For instance, Wal-Mart tailors its merchandising offerings to the specific needs of diverse cultural groups with distinct life-style-orientations (i.e. African American, Hispanic American, and White American). Companies such as Walmart recognize that diverse life-style groups reside within different parts of a city and exhibit life-style differences prevalent among different ethnic groups within a city such as Chicago. There are numerous examples of life-style retailing, e.g. Next, the Gap, Laura Ashley, Denim, No Fear, Quicksilver, and Benetton (Helman and De Chernatony, 1999). Each of these embodies a distinct set of life-style values, which appeal to a particular consumer segment.

A further development in retailing has been the adoption of own-brand strategies, and thus a number of retail offers in the marketplace can be viewed as life-style retail brands (Helman and De Chernatony, 1999). Life-style marketing and merchandising have increasingly come to dominate how retailers approach apparel, and this has powerfully impacted how denim is offered to different target markets with different life-style orientations (Duff, 2001). For example Sears, one of the best known retailers, after much segmentation researchers in the USA tried to undertake focused life-style analysis for certain product categories in the 2000s. Sears updates its operations; changes implemented aim to streamline and redefine its company image (USA Today, 2001). Service companies such as banks, insurance, and investment companies also have established multi-cultural marketing units and have started to search for new assets with marketing campaigns created in the languages of and reflective of the life-style patterns in ethnic consumers. Cardona (2000) stated that segment marketing is growing as a tool for financial service industries such as banking.

Purpose of the study

Understanding consumer life-styles and value orientations in any country can be very useful in profiling an individual consumer and/or targeting select consumer groups for marketing planning purposes. Past consumer behavior and psychology literature has identified different types of consumer life-style groups. Each group has its own unique demographic, socio-economic, and behavioral characteristics. As such, consumer life-styles as correlates of purchase are being utilized by such target markets as quality seekers, novelty/fashion seekers, comparison shoppers, information seekers, and brand loyal and habitual consumers (Schuster and Dufek, 2004). These are significant consumer life-style segments that may show similarities and differences across nations and cultures. In spite of the ongoing interest among researchers and public policy makers regarding the consumer life-styles, most of the studies conducted so far continue to focus on theory-laden, self reports of spouses/individuals living in single industrialized Western countries. Very little research work, so far, has dealt with cross-cultural and cross-national perspectives or those of comparative studies (Kucukemiroglu et al., 2005).

The purpose of this empirical research study is to present cross-cultural comparisons of life-styles, value orientations of consumers in the purchase of a variety of goods and services in the similar environments of North America, namely rural areas of the USA and Canada. Marketing managers planning to set up operations in this area often believe that North American region is culturally similar and may target its consumers by using marketing strategies that strive for economies of scale, developing a standardized product, and utilizing standardized marketing appeals, i.e. using a regio-centric marketing approach. Their attitude may, in part, be supported by current practitioners who frequently refer to North American consumers as an undifferentiated group, sharing similar culture and behavioral tendencies, on one hand, and on the other, a common recent history.

The specific objective of this exploratory research study is to examine if consumers’ life-styles and value orientations vary in two different countries as well as examining dominant life-styles prevalent. In the past, Canadian and US consumers, who were very similar in demographics and as such may have been previously treated the same way by marketers and public policy makers alike. In reality, both groups have very different life-styles and thus motivations and value systems. To this end, the specific purpose of this study is to create consumer life-style profiles in regions of Canada and the USA. Having delineated similar life-style patterns in North America, the study tries to correlate demographic and socio-economic factors with those of values, attitudes, and life-styles in the respective countries. The study also examines any possible differences in purchasing behavior of North American consumers. In the final analysis, an answer was sought to the question: are regio-centric marketing strategies feasible in North America or do we have to develop localized or nation-based (polycentric) marketing strategies?

Methodology

The data for this study was collected through self-administered questionnaires. The questionnaires were administered in two different locations of North America. First, in the winter of 2001, they were administrated in Brandon, Manitoba, Canada. Second, in the spring of 2001, the surveys were administered in the rural part of South Central Pennsylvania (York and Lancaster counties). Both regions are similar to each other, each having a flourishing agricultural and agro industries and a significant number of companies in the service and manufacturing industries as well. They both are typical representation of the rural population of both countries. As such, the two regions lend credence to a comparative study of this nature.

The data was collected through a drop-off and pick-up method among a sample of 300 Canadian married or common-law families and 400 in the USA. The drop-off/pick-up data-gathering method was utilized. This method is similar to face to face interviews in that the survey questionnaire is delivered to respondents by an interviewer who explains the aims of the survey and how to fill out the questionnaire. Respondents are then allowed to complete the questionnaires in private. Later, the interviewer returns to the households to pick up the questionnaires. This method incorporates the advantages of a number of data collection methods. It is not as time-consuming as face-to-face interviews and is able to secure a higher response rate than mail surveys (Stover and Stone, 1978; Imperia et al., 1985).

Interviews were conducted by marketing research students under the supervision of one of the researchers in each locality. The sampling frame in both studies was the local telephone directories. Respondents were randomly selected from the telephone directories. Unlisted numbers were not part of the sampling frame. As this is an exploratory study, investigating the general behavioral tendencies and life-style orientations of respondents, this should not create a sampling bias. One person in each telephone directory page of York and Lancaster, Pennsylvania and two persons in each Brandon, Manitoba telephone directory were selected. The person whose name was listed in the directors was the chosen respondent. If the selected person did not agree to participate in the survey, the second, and the third person was contacted. Prospective respondents were asked if they wanted to participate into this cross-cultural study. For those who agreed to participate, a questionnaire was delivered to their given address, and they were asked to complete the questionnaire at their most convenient time. Arrangements were then made to pick up the completed questionnaires at a specified time, generally ten days later. After this time, a chosen student from a nearby university was selected to personally pick up the completed surveys. In total, 238 questionnaires were retrieved. Due to some of the questionnaires not being completed properly, only 209 were able to be used for the purpose of the study.

Being the second largest city in the Province of Manitoba, Brandon, Canada covers 26 square miles. It has a strong, ever-growing economy, and it's people and industries are diverse. Prominently, the city is rooted in agriculture and the agri-industry, but it also has businesses in the service and manufacturing industries. According to the Statistics Canada, 70 per cent of Brandon actually is in the service industry, even though they are known to have their strength in agriculture. Also, the average total income of the area is 22, 430 dollars (Canadian dollars) per person (Statistics Canada, 1996). The city was chosen for the study because this is believed to be a typical western Canadian city. The number of married or common-law families who constituted the Brandon survey area population was 9,140. The Brandon data used for this research was collected through the drop-off and pick-up method among a sample of 300 married or common-law families. All interviews conducted were done under the supervision of one of the researchers for this study, and they were completed by marketing research students from various universities in the area. All survey participants were selected randomly, and their households were all within the Brandon city limits.

For the US data, the survey was conducted in the tri-county region of South Central Pennsylvania. Within this region of the Commonwealth of Pennsylvania, two cities of Lancaster, and York, were selected as the base for sampling of the population. A stratified sampling method was utilized to match both the Canadian and US data in terms of the economic well being of residents, gender, occupation, education, and age. First, similar to the Brandon study, households in each city were contacted at their workplace and/or their home by phone and asked if they wanted to participate in this cross-cultural study. Then, the drop-off and pick-up method was used and questionnaires were hand delivered to the houses. After a ten day waiting period, questionnaires were personally retrieved. Of the 400 households contacted, 378 responses were received and 26 questionnaires, though completed, were not usable due to incompleteness and response errors. The final analysis was based on 352 completed questionnaires.

Before the survey administration, a pre-test of the questionnaire was undertaken with a small group of respondents in both localities, and the results were satisfactory. The questionnaire consisted of five sections. In the first section, fifty-six Activities, Interest and Opinions (AIO) and Values and Life-Styles (VALS) statements obtained from marketing literature and SRI Consulting Business Intelligence Research Programs were used to identify life-style indicators of Canadian and US consumers (Wells, 1975; Wells and Tigert, 1977; Mitchell, 1993; Anderson and Golden, 1984, SRI Consulting Business Intelligence, 2003). A five-point Likert scale was used, with “1” being “strongly disagree” and “5” being “strongly agree.” The second section of the questionnaire contained questions regarding the household decision-making process. The types of questions used in the instrument were very similar to those incorporated by Davis and Rigaux (1974). Each respondent was instructed to indicate the primary decision maker in the family (husband, wife, or the husband and wife jointly) in regards to: (1) when they bought, (2) where they bought, (3) what they bought, and (4) how much they paid for seven select products and services, which were groceries, major appliances, furniture, automobiles, banking services, vacations, and life insurance. The third section of the questionnaire consisted of questions about consumer ethnocentrism. Table I shows demographic and socio-economic characteristics of the survey respondents.

Before moving on to the interpretation of the survey data, a few points regarding the collection of the data need to be clarified. In a cross-cultural research study, two samples must be matched as closely as possible in terms of the more important demographic and socio-economic characteristics (Brislin and Baumgardner, 1971; Berry, 1969; Kaynak, 1984). This is usually very hard to accomplish, especially when two countries do not have directly similar living standards, income, or educational systems. Therefore, in this study every effort was made to match the samples on three demographic characteristics: sex, marital status, and social class. Second, the findings should not be generalized to the entire population of the US or Canada, because the samples were drawn from only the middle and upper socio-economic groups of the two countries. Third, the data was collected only from married or common-law families. Thus, the findings could not be generalized to the decision making process for all groups of people.

As detailed in Table I, of the total 561 respondents from North America, 352 respondents were American and 209 were Canadian. Of this total, approximately 32 per cent were male and 68 per cent were female, and it was distributed between the two countries in a similar fashion as the USA proportion was 31.3/68.7 and the Canadian proportion 32.1/67.9. The reason for a high proportion of female respondents in both samples may be attributable to the fact that as the questionnaires were dropped-off in the homes of people, more females than males were at home, hence the higher percentage of female respondents. A significant portion of the total respondents (56.3 per cent) were in the 30 to 50 years old age group (middle age), 21.6 per cent were less than 30 years of age, and the remaining 22.1 per cent were above 50 years of age. In the survey, proportionately speaking, the Canadian sample consisted of more respondents from the above 50 years of age group compared to US respondents (38.3 per cent vs. 12.5 per cent). A substantial portion of the survey respondents (34.9 per cent) earned US/CAN$50,000 and above. As far as educational attainments of the respondents are concerned, some 39 per cent had high school, 21 per cent some college, and 25.5 per cent possessed university qualifications. It can be concluded that the majority of the respondents had higher educational attainments.

Findings and discussion

To understand the differences and similarities between US and Canadian consumers’ purchasing and consumption related behaviors, t-tests were performed on respondents’ reactions to fifty-six AIO and VALS statements obtained from the marketing literature (Kahle, 2003). Table II shows that there are statistically significant differences between US and Canadian consumers at p ≤ 0.05 level in 23 statements. The study results indicate that there are discernable attitudinal and behavioral differences between American and Canadian consumers. The major differences between the two countries are shown below.

American consumers are more interested in specials than Canadians and they do often shop for specials.
Americans check the prices in grocery stores even for small items more so than Canadian consumers. This means that Americans are more price conscious and price sensitive. US consumers may shop around for better prices because there are more places to shop and a higher disparity of prices among shops. In Canada, on the other hand, there are fewer shops and prices of the same or similar goods are almost always the same.
Compared to Canadians, Americans watch more mass media advertisements for the announcements of sale items. In the USA, more mass media advertising (broadcasting) is utilized, whereas in Canada more sales promotion (narrowcasting) is utilized.
American consumers believe that a person can save a lot of money by shopping around for bargains and specials. This means that Americans are more prone to be bargain hunters. There is higher price disparity in the USA, which directly causes Americans to be bargain hunters. On the other hand, since there is less price disparity in Canada, then Canadians will not be on the hunt for bargains.
In general, Americans have one or more outfits that are of the very latest style.
Americans more than Canadians place a larger importance on comfort than on the product's fashion ability and style.
Americans would rather spend a quiet evening at home than go to a party.
More so than their US counterparts, Canadians enjoy social events where there is plenty of music and interaction with others.
Canadians may have more family support/involvement when children are sick, more career aspirations, more decorating pride in their homes than their American counterparts as indicated by the statements of “when my children are ill in bed, I drop most everything else”, “my children are the most important things in my life”, “I try to arrange my home for my children's convenience”, “I take a lot of time and effort to teach my children good habits.” This is an indication that Canadians are more home bound, so family-oriented types of promotions in this region will play a tremendous role.
Americans consider themselves more independent than Canadians. Person-to-person marketing (advertising) would play a higher role in the USA.
Americans more than Canadians are influenced by the advice and recommendations of their friends and relatives concerning brands and retail stores to patronize. Opinion leaders can be used very effectively in US marketing (advertising campaigns) strategies.
Americans do not like to undertake household chores.
Americans like to sew and frequently do.
Canadians consume more canned foods than Americans do.
Americans are more fond of and consume more diet foods than Canadian consumers.
Americans more than Canadians are open to new product ideas and try them a lot earlier than their friends and neighbors. American consumers are more innovative and would try any product as long as it is new to the market. The diffusion rate of new products would be a lot faster in the USA.
Canadians more than Americans engage in sport and exercise activities.
Compared to Americans, Canadians are more eager to spend one year or more in a foreign country. Canadians would be more willing to purchase and consume imported products.
Americans prefer to pay cash for products and services they purchase, more so than their Canadian counterparts.

These differences may be used to establish a basis for the creation of different marketing plans, strategies, and programs. In particular, different promotional and target marketing approaches may be used in reaching different pockets of consumers. Life-style segmentation is used in conjunction with demographic mapping. As such, life-style segmentation systems use demographic and aggregated consumer demand data to classify every household in North America into a unique market segment. Each segment consists of consumers that share similar interests, purchasing patterns, financial behavior, and demand for specific products and services (Piccilo, 1999).

Consumer types in North America

To identify different life-styles prevalent in the two study areas, the scores obtained from both the US and Canadian respondents were utilized. Fifty six variables used for the measurement of AIO profiles were examined to identify consumer types in both countries. US and Canadian respondents’ 56 life-style statements were factor-analyzed, using principal component analysis with orthogonal VARIMAX rotation, to identify the underlying dimensions of life-style factors that explained the variance in these statements. From the VARIMAX rotated factor matrix, seven factors, representing 70.73 per cent of the explained variance, were extracted from the original 56 variables, but the results showed no interpretable grouping of items. As a result, 11 different statements such as: depend on canned food for at least one meal a day, can not get along without canned food, think they will probably have more money to spend next year, think five years from now they think the family income will probably be a lot higher, pay cash for everything they buy, enjoy most forms of homework, make their own or their children's clothes, think they can save a lot of money by making your own clothes, think that it is good to have credit cards, have personally worked in a political campaign or for a candidate or an issue, and people come to them more often than they go to them for information about brands were deleted from the analysis. Seven life-style factors with 45 variables were defined by the original 56 variables that were loaded most heavily (loading > 0.50) on them. The VARIMAX process produced a clear factor structure with relatively higher loadings on the appropriate factors. The variables with higher loadings signaled the correlation of the variables with the factors on which they were loaded. Reliability analysis (Cronbach's alpha) was calculated to test the reliability and internal consistency of each factor. In evaluating scale reliability, we followed the suggestions of Fornell and Larcker (1981). The results showed that the alpha coefficients for the seven factors ranged from 0.64 to 0.89, well above the minimum value of 0.50 considered acceptable as an indication of reliability for basic research (Nunally, 1978). Table III shows the results of the factor analysis.

Once the general life-style dimensions of consumers were determined, we assigned each North American consumer from both USA and Canada to one of the seven clusters, according to cluster membership. Table IV shows the average distance from the centroid. In general, the cluster profiles were consistent with the conceptual typology of lifestyle based on the inducement-contribution framework.

The distribution of the respondents to seven life-style groups is shown in Table V. The largest cluster is economically-conscious, which accounted for 21.9 per cent (123 respondents) of the variance. The second largest cluster is Independent group, which accounted for 16 per cent (90 respondents) of the variance. The third largest group, with 15 per cent (84 respondents) of the variance is family-oriented. The fourth largest group, with 13.5 per cent (76 respondents) of the variance, is fashion-oriented, outgoing and socially conscious. The fifth category is the family-oriented and socially-conscious cluster, which represented 11.9 per cent (67 respondents) of the variance. The sixth category which is very close to the previous one, is socially-conscious cluster, which represented 11.8 per cent (66 respondents) of the variance. The last group in order of importance is home-oriented, which accounted for 9.8 per cent (55 respondents) of the total variance. In addition, we conducted linear discriminant function analysis using the cluster membership as the dependent variable and the clustering variables as the independent variables. The results showed that 97 per cent of the respondents were assigned to their correct clusters. These results increase our confidence in the seven cluster solution being adequately robust in providing empirical confirmation of the theoretical typology based on the inducement-contribution framework.

Next, the chi-square test of independence was performed between the seven life-style dimensions and the country of origin (USA and Canada) of the consumers to see if consumers’ dominant life-style group is influenced by their country-of-origin. Chi-square test results (see Table V) showed that there is a statistically significant (p = 0.000) difference between the country-of-origin of the consumer and the cluster they belong to. The test of proportions between the US and Canadian consumers for each cluster of life-style shows that while the proportions of US consumers in clusters 5, 6, and 7 were higher than the Canadian consumers, the proportion of Canadian consumers in clusters 2 and 4 were higher than US consumers. Finally, no statistically significant difference was found between US and Canadian respondents for clusters 1 and 3. A summary of the findings is depicted in Figure 1.

Further, a nominal logistic regression method was used in an alternative way to identify the independent effects of country on life-style clusters, by conducting a pair-wise comparison of the life-style clusters between countries. Table VI shows a summary of the results.

The first set of estimated logits, labeled Logits 1, 2, 6, 10, 11, 15, 16, 19, 20, and 21, are the parameter estimates of the change in logits relative to the reference events. The p-values of 0.069, 0.081, 0.220, 0.174, 0.648, 0.089, 0.017, 0.093, 0.600, and 0.236 for life-style cluster indicate that there is insufficient evidence to conclude that a change in country from the USA to Canada affected the choice of socially-conscious style as favorite life-style as compared to independent, home-oriented, economically-conscious/socially-conscious, family-oriented/independent, economically-conscious/independent, economically-conscious/family-oriented, home-oriented/economically-conscious, home-oriented/fashion-oriented, health-conscious/fashion-oriented, and home-oriented/health-conscious. The second set of estimated logits, labeled Logits 3, 4, 5, 7, 8, 9, 12, 13, 14, 17, and 18, had p-values of between 0.0-0.05, which indicates that there is sufficient evidence to conclude that a change in country affected the choice of life-style cluster.

Logit 3. The positive coefficient for Canada shows Canadians tend to be health-conscious and lead more active than socially-conscious daily lives, over socially-conscious compared with Americans who are more socially-conscious. The estimated odds ratio of 3.85 implies that the odds of being health-conscious and leading an active daily life over being socially-conscious is about four times higher for Canadians.

Logit 4. The positive coefficient for Canada shows Canadians tend to be fashion-oriented and outgoing over socially-conscious compared to Americans, who are more socially-conscious over fashion-oriented and outgoing. The estimated odds ratio of 4.85 implies that the odds of being fashion-oriented and outgoing over being socially-conscious is about 5 times higher for Canadians.

Logit 5. The positive coefficient for the USA shows Americans tend to be family-oriented over socially-conscious compared to Canadians who are more socially-conscious than family-oriented. The estimated odds ratio of 5.74 implies that the odds of being family-oriented over being socially-conscious is about 5.75 times higher for Americans.

Logit 7. The positive coefficient for Canada shows Canadians tend to be more home-oriented than independent compared to Americans, who are more independent than home-oriented. The estimated odds ratio of 4.69 implies that the odds of being home oriented over being independent is about 4.69 times higher for Canadians.

Logit 8. The positive coefficient for Canada shows that Canadians tend to be more health-conscious and tend to lead active daily lives more than being independent compared to Americans who are more independent than health-conscious and prone to leading active daily lives. The estimated odds ratio of 8.46 implies that the odds of being health-conscious and leading an active daily life over being independent is about 8.46 times higher for Canadians.

Logit 9. The positive coefficient for Canada shows Canadians tend to be more fashion-oriented and outgoing over being independent compared to Americans who are more independent over fashion-oriented and outgoing. The estimated odds ratio of 10.66 implies that the odds of being fashion-oriented and outgoing over being independent is about 10.46 times higher for Canadians.

Logit 12. The positive coefficient for Canada shows Canadians tend to be more home-oriented over being family-oriented compared to Americans who are more family-oriented over home-oriented. The estimated odds ratio of 12.25 implies that the odds of being home-oriented over being family-oriented are about 12.25 times higher for Canadians.

Logit 13. The positive coefficient for Canada shows Canadians tend to be more health-conscious and lead active daily lives more than being family-oriented compared to Americans who are more family-oriented than health-conscious and prone to lead active daily lives. The estimated odds ratio of 22.10 implies that the odds of being health-conscious and leading an active daily life over being family-oriented is about 22 times higher for Canadians.

Logit 14. The positive coefficient for Canada shows Canadians tend to be more fashion-oriented and outgoing over being family-oriented compared to Americans who are more family-oriented over fashion-oriented and outgoing. The estimated odds ratio of 27.86 implies that the odds of being fashion-oriented and outgoing over being family-oriented is about 28 times higher for Canadians.

Logit 17. The positive coefficient for Canada shows Canadians tend to be more health-conscious and lead active daily lives more than being economically-conscious compared to Americans who are more economically-conscious over health-conscious and prone to lead active daily lives. The estimated odds ratio of 6.60 implies that the odds of being health-conscious and leading an active daily life over being economically-conscious is about 6.60 times higher for Canadians.

Logit 18. The positive coefficient for Canada shows Canadians tend to be more fashion-oriented and outgoing over being economically-conscious compared to Americans who are more economically-conscious over fashion-oriented and outgoing. The estimated odds ratio of 8.32 implies that the odds of being fashion-oriented and outgoing over being economically-conscious is about 8.32 times higher for Canadians.

Conclusions and implications

Consumer life-style analysis provides a greater understanding of consumers’ buying and consumption behaviors. That is, who buys what products? One can influence their purchasing and consumption differences by appealing to their life-style orientations, wants, and needs. For instance, consumers who are primarily motivated by achievement look for products and services that demonstrate success to their peers. Studying consumer life-styles is a unique way of finding out buyer behavior differences and similarities and prevailing market segments. This empirical study findings indicate that consumer life-style dimensions among Canadian and American consumers do have an influence on their buying and consumption behaviors.

In this study, 561 consumers of North America were subjected to a Cluster Analysis, which generated seven distinct life-style segments. It is shown that there are different in-between country and across country behavioral tendencies and purchasing actions. In a few clusters, there emerged significant differences between the consumer segment clusters of the USA and Canada. The apparent differences are encountered by behavioral differences between the two countries’ consumers. Country differences set aside, gender, income, and age variations among clusters were also observed. These study findings have very powerful marketing planning implications. The application of different consumer life-styles to local/regional marketing strategy initiatives by identifying the concentration of consumer groups residing within a specific area/region or ZIP code create important target markets for cultivation and exploration.

In today's North American market, market differentiation at country, regional, segment, and sub-segment levels is a must to satisfy the ever discerning needs of consumers. It becomes very important for North American companies to understand what North American consumers’ needs are and deliver not only appropriate products and services, but appropriate and suitable benefits for the life-styles of both Canadian and US consumers. Seven life-style segments identified by the research provide rich, flexible, and actionable information for marketing planning purposes.

Companies in both countries can apply life-style analysis study results to understand their uniquely dynamic and ever changing consumers better. Also, companies planning on doing business in North America can gain a better understanding and a critical strategic advantage by using the survey findings that explain the underlying dimensions and characteristics of North American consumers. By looking at the survey data, one can make informed decisions on which areas standardized marketing strategies should be used and in which areas localized types of marketing strategies should be used by companies.

Future research avenues

The data presented here are static and cross-sectional in nature. There is an acute need for further research in this important research area. First of all, a study of urban consumers may produce different life-style profiles than the ones presented here. As well, a comparison of rural and urban consumers across two countries may produce better insights in this research area. The study was conducted during winter in Canada while in the USA, it was conducted during spring. This could be considered as a limitation factor for this study. As there are no studies in the current literature indicating that life-styles are constant across the four seasons, the difference in timing may effect the validity of measures. One may argue that one's life-style and behavioral tendencies during these two seasons may be different due to the limitations in the activities that people are involved with.

This study only examined North American consumer life-styles within the framework of product group (form). Additional studies may look at consumer life-styles by use of product brands and even product options. As it was pointed out in a study by Taylor (1995), Porsche's (automobile brand) identified five categories of American customers’ psychographic profiles. Porsche used the psychographic profiles to develop advertising tailored to each customer type. The issue of the impact of life-style on consumer behavior at cross-cultural/national and product/brand levels is identified by consumer behavior researchers as an area, which would benefit from further investigation. As well, descriptions of consumer environmental influences, including group and reference groups, and situation, might lend a further perspective on consumer purchasing and consumption behaviors in the countries investigated.

This study is static in nature and looks at a particular phenomenon in one particular time period. Additional studies may look at the topic in a longitudinal and cross–sectional manner. Further studies examining the life-styles of different demographic, socio-economic and cultural groups, as well as studies of a comparative nature may shed additional light on this under researched area of inquiry.

Figure 1Distinct consumer life-styles of North American consumers

Table IDemographic and socio-economic characteristics

Table IIDifferences in consumer life-style between USA and Canada

Table IIILife style factors in North America

Table IVDistribution of different life-styles in North America

Table VCountries and clusters

Table VINominal logistic regression: cluster vs. country

References

Anderson, W.T., Golden, L. (1984), "Life-style and psychographics: a critical review and recommendation”, in", in Kinnear, T. (Eds),Ann Arbor, MI, Vol. XI, Association for Consumer Research pp.405-11.