Consumer heterogeneity evolving from social group dynamics: Latent class analyses of German footwear consumption 1980–1991

Boundedly rational consumers rely on their social environment as a source of information. Drawing upon psychological theories about social comparison processes, the author hypothesizes that social reference groups underlie market segments. New reference groups can emerge from social comparison processes, leading to the development of new submarkets and the evolution of aggregate consumer heterogeneity. The author has used a series of cross-sectional surveys on the footwear consumption of German men between 1980 and 1991 to test these propositions. By using latent class models, this study describes the emergence of a submarket for athletic shoes as a function of the appearance and establishment of a new social consumer group.