Member Article

New research finds that the influence of price when purchasing an app drastically differs from country to country

New research from Imperial College Business School finds that a country’s culture and economic structure can have a significant influence over consumers when purchasing apps - with some countries viewing ratings and reviews as a much more persuasive factor than price.

Professor Gokhan Yildirim and his colleagues reviewed purchasing data on thousands of apps and examined the influence that price, reviews and star ratings had on the purchasing decisions in 60 different countries.

According to the study, consumers in Central European and Asian countries view price as more of an influential factor than those in Scandinavia and Central America. One of the reasons for this, according to Professor Yildirim, is the larger number of smartphones in Central European and Asian countries, as such countries typically have savvier consumers who are more likely to consider a number of criteria before making a purchase.

The study also suggests that Scandinavian and Central American countries see reviews and star ratings as much more influential than price. This is likely due to a lower income inequality and a less masculine culture in Scandinavian and Central American countries, but also a higher level of scepticism, meaning consumers are more reliant on user’s feedback before purchasing.

Professor Yildirim says,
“The world of apps has become so much more competitive, meaning consumers are using more than just a price to determine which are worth purchasing - with rankings, ratings and reviews becoming just as important, if not more so”.

Professor Yildirim also found that a country’s average income levels had no significant impact on purchasing figures. In fact, a higher app price can actually positively reflect its quality, making it more desirable.

This research offers important insights for app developers and marketers by predicting how much marketers should decrease price if it has negative or a low number of reviews in different countries. It also identifies which countries value particular purchasing factors more than others, enabling marketers to tailor their strategies accordingly, creating locale-specific approaches.

Professor Gokhan Yildirim says,

“As apps are becoming, globally, a cheaper alternative to many services such as banking and healthcare, and as the app market becomes more saturated, marketers must look into ways to encourage customers and increase purchases of their app-based offerings. Placing more emphasis on reviews in countries with high scepticism, or perhaps lowering the price of an app in countries with a high price sensitivity are relatively simple measures which could help secure high levels of success against competitors”.

This was posted in Bdaily's Members' News section by Peter Remon .