The new middle class in emerging markets: How values and demographics influence discretionary consumption

• Author: Erin Cavusgil,S. Tamer Cavusgil,M. Mithat Üner,Aybegüm G. Belbağ
• Date: 01 March 2019
• DOI: http://doi.org/10.1002/tie.21980
• Published date: 01 March 2019

INTERNATIONAL BUSINESS THEORY AND APPLICATION

The new middle class in emerging markets: How values

and demographics influence discretionary consumption

Aybegüm G. Belba

g

1

| M. Mithat Üner

2

| Erin Cavusgil

3

| S. Tamer Cavusgil

4,5,6

1

Department of Business Administration,

Faculty of Economics and Administrative

Sciences, Bartin University, Bartin, Turkey

2

School of Business, Atilim University, Ankara,

Turkey

3

School of Management, University of

Michigan-Flint, Flint, Michigan

4

Georgia State University, J. Mack Robinson

College of Business, Atlanta, Georgia

5

University of South Australia Business

School, Adelaide, South Australia, Australia

6

Leeds University Business School, Leeds,

West Yorkshire, England

Correspondence

S. T. Cavusgil, Georgia State University,

J. Mack Robinson College of Business,

P.O. Box 3989, Atlanta, GA 30302.

Email: stcavusgil@gsu.edu

The rise of new middle-class consumers in rapidly transforming emerging markets has attracted

the attention of Western business executives. What they know about this growing segment of

customers will determine whether they succeed or fail in these markets. The present study

examines the factors that drive the discretionary consumption of this new middle class, includ-

ing the effects of consumerist values, religious values, occupation, education levels, and owner-

ship of fixed assets. The study draws its insights from data gathered from 391 new middle-

class consumers in Ankara, the second-largest city in Turkey. The findings provide important

implications for businesses, both indigenous and foreign. An overall implication is that man-

agers ought to understand and qualify the new middle class in emerging markets not simply by

their access to disposable income but by deeper attitudinal and behavioral characteristics.

KEYWORDS

consumerist values, emerging markets, Iceberg Model, new middle class, religious values,

Turkey

1|INTRODUCTION

While the concept of middle class goes back several centuries, and

middle-class households have always existed in modern societies, the

concept of the new middle class is closely linked with the most recent

phase of globalization and market liberalization in emerging markets.

As such, the new middle class refers to individuals who have joined

the ranks of “middle income”consumers in emerging markets since

the 1980s—the beginnings of a remarkable transformation in some

25 rapidly developing economies around the world. While members

of the new middle class share similarities in terms of purchasing

power with the traditional middle class, they tend to be distinct in

terms of political attitudes, social habits, and educational

achievement.

Globally, it is expected that some 1.6 billion people will join the

middle class by 2030, and this number should increase to 2.6 billion

by 2050, constituting some one-third of the world's population

(Ward & Neumann, 2012). Over the past three decades, new con-

sumer markets flourished in emerging-market economies, with

millions of people joining the global middle class. A rapidly growing

and increasingly affluent middle class should generate enhanced

demand for consumer goods (Cavusgil, 2013). This group presents

new and highly attractive opportunities for Western businesses.

Turkey is a prime example of a rapidly transforming and liberaliz-

ing market, and examining its new middle class is instructive. Studies

in the Turkish context have so far presented the new middle class as

individuals who break their traditional habits and maintain lifestyles

and identities that are closely related to consumption

(Karademir, 2009).

The purpose of the present study is to examine the effects of

consumerist values, religious values, occupational backgrounds, edu-

cational achievement, and ownership of fixed assets of the new mid-

dle class on their discretionary consumption. Specific research

questions are as follows: How does the new middle class identify

itself? How are the consumption expenditures of the new middle

class aligned? Which consumption groups are discretionary for the

new middle class? What are the educational and occupational and

asset ownership characteristics of the new middle class? What are

the consumerist and religious values of the new middle class? And,

finally, how do these characteristics of the new middle class affect

their discretionary consumption?

This article is based on the PhD thesis “The New Middle Class in Turkey: A

Study with a Marketing Perspective,”completed at Gazi University Institute of

Social Sciences, Ankara, Turkey, by Aybegüm Güngördü Belba

g.

DOI: 10.1002/tie.21980

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