INTRODUCTION
Significance of the Study
In the current era of a heavily consumer-driven society, overconsumption has
steadily become a pressing issue in the market. This is even more particularly so in the
context of products that are marketed through the use of promotional strategies such as
sales, discounts, special offers, etc. Such tactics are deliberately engineered to
encourage consumers to give into the urge to purchase which often creates a sense of
urgency and a fear of missing out (FOMO) in a product (Eleventh Hour: How Social
Media Culture of Consumerism Is Fueling the Climate Crisis, 2022).
College students are especially exposed to such strategies due to their highly
frequent online shopping and social media usage. Since college students are still in the
early to middle stages of developing their own, independent financial decision-making
skills this - along with their limited financial resources, social pressure, and appeal of a
cost-saving bargain – may lead them into developing purchasing patterns that exceed
their actual needs, thus resulting in overconsumption (Koning et al., 2024).
This increased tendency to lean towards overconsumption is a significant issue
not only because of the risk to students’ financial stability, but also because such habits
formed during formative years of learning financial independence can extend into
adulthood and result in greater issues such as Compulsive Buying Disorder (Soares &
Moniz, 2023).
In relation, studies such as the one Lukas and Howard (2021) conducted, found
that there is evidence to suggest that financial literacy – more specifically budgeting –
plays a significant role in curbing spending habits among consumers. Their study, which
was conducted in Scotland, discovered that budgeting had an economically meaningful
impact on lowering spending.
Thus, this study aims to shed light on the impact of promotions in driving college
students’ consumer choices and how financial literacy which in this case is identified as
budgeting, acting as the moderating variable, can influence this phenomenon. By
studying the interplay between product promotions, overconsumption, and budgeting,
this research seeks to provide insights that can contribute to the reduction of
unnecessary financial strain of students, promotion of responsible financial practices,
and fostering healthy long-term consumer behavior.
Objectives
1. To determine the extent on how product promotions impact the purchasing
behavior of college students.
2. To assess the prevalence of overconsumption among college students.
3. To assess the financial literacy in terms of budgeting among college students.
4. To examine whether increased exposure to product promotions plays a
significant role in promoting overconsumption for consumers.
5. To determine how varying levels of financial knowledge impacts the effect of
product promotions on consumer's overconsumption.
Expected Outputs of the Study
This research intends to explore how product promotions affect the consumer's
overconsumption behavior. It aims to identify the socio-demographic profile of the
respondents, their exposure to product promotions, and the degree of
overconsumption among the respondents. Lastly, it will examine whether financial
literacy has a moderating role on the relationship between product promotions and
overconsumption among the consumers.
Conceptual Framework
The foundation of this study is the idea that consumer’s exposure to product
promotions has a significant impact on their propensity for overconsumption, and that
this relationship is strongly impacted by their degree of financial literacy.
Product
Overconsumption
Promotions
Financial
Literacy
Figure 1. Schematic diagram of the study