Posts Tagged ‘decision making’

Dignity drives purchasing decisions for South African low income consumers

graph-1There is so much I was going to say when I came across this snippet in the news about South African consumer habits among the lower income folk for yesterday’s post. I am not convinced by the framing of the interpretation of the qualitative data but that’s an embedded SA problem with qualitative research in townships. So for now, I’ll just stop with the following quote:

Melzer says spending on clothing in South Africa is phenomenal. Talking to people about their spending patterns, the word “dignity” comes up again and again, she says.

Moreover, customers aren’t necessary buying what businesses think they are selling. A clothing retailer might think it is selling clothes, when in actual fact it is selling dignity or status.

Patterns of behaviour: trade offs made in time and money

This insight emerged from a conversation we had yesterday with Jane Mbithe, who manages EasySurf cyber  at the Yaya Centre. Reflecting on patterns of behaviour among her high net worth customers who often already possessed the latest laptops and broadband modems, she said it boiled down to the elements of time and money with respect to certain tasks at hand.

The broadband modem is fine for regular browsing (within reason, as I’m discovering, having recently ‘spent’ 35 MB just to find one news article in a regular Google search – majority of websites are far too big and heavy for no discernible reason) but when the time came to download a large document received in email or some other such data heavy activity, the trade off made between cost of 15 minutes at the Ksh 3/min high speed cyber’s facilities to complete this task versus taking far longer (consuming both available data and thus, airtime) using the slower modem or other connection was a no brainer.

I found it fascinating to note this pattern of using the more expensive source that was faster for certain activities being reflected in online activities as I’ve seen this ‘cost/benefit analysis’ manifested around the developing world in kitchens where the choice of cooking fuel is based on the intended task as well. (more expensive LPG to quickly fry an egg versus cheaper charcoal to cook beans slowly). The underlying factor is the motivation to maximize the return on investment in a prepaid source of [what may be required] – whether its electricity in The Philippines or South Africa (where rural stores stock LPG powered refrigerators) or the ubiquitous airtime minutes available on every mobile phone.

In this context, the high speed cyber cafe, though expensive, is analogous to the more expensive but faster LPG versus the slower, cheaper broadband modem (charcoal equivalent).

This observation implies that the purchasing patterns and decision making behaviours already identified have influence regardless of the level of technology or advanced ‘modern’ nature of the purchase, and thus, purchasing power.