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Course plan 1

Course plan 1. Session 1 a) Course introduction b) Cross-cultural consumer behaviour Textbook: Chapters 1, 2, 3 and 4 (please focus on chapter 4) Session 2 Standardization vs. adaption 1 Textbook: Chapters 5, 6, 8 From the text collection: Theodore Levitt: The Globalization of Markets

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Course plan 1

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  1. Course plan 1 Session 1 • a) Course introduction • b) Cross-cultural consumer behaviour Textbook: Chapters 1, 2, 3 and 4 (please focus on chapter 4) Session 2 • Standardization vs. adaption 1 Textbook: Chapters 5, 6, 8 From the text collection: Theodore Levitt: The Globalization of Markets William B. Werther, Jr.: Toward Global Convergence Marieke De Mooij: Convergence and divergence in consumer behaviour: implications for global advertising Session 3 • Standardization vs. adaption …continued See lecture 2 Session 4 • Cross-cultural marketing research Textbook: chapter 7 From the text collection: Eastin and Daugherty: Past, Current, and Future Trends….. SIS6 F06

  2. Macintosh Powerbook launch 1991 Background Apple wanted int’l campaign (16 countries) A’s first attempt at co-ordinated European launch A’s country managers enjoyed much autonomy A three years behind competitors How it was done - Apple organizations in DK, D, GB, F, S, USA presented ideas for print ad campaigns – checked by agency. - The 16 country managers were shown the ideas but origins were disclosed. - The French idea won; ”The Powerbook is for storing ideas not data.” - Idea based on ideas scribbled on paper tablecloth, which wouldn’t work in other countries. - Each country made its own ads based on the French idea following written guidelines form the agency. - Agency called it a ”campaign done multi-locally”. SIS6 F06

  3. Levitt: The Globalization of Markets Technology is the main force of globalization. ”Which strategy is better is not a matter of opinion but of necessity.” ”Gone are accustomed differences in national or regional preference.” "National rules of the road differ…." "Everyone……wants products and features that everybody else wants. If the price is low enough, they will take highly standardized world product…” (Usunier (2000), p. 140: ”This naive view of world diversity states that we are all converging towards a ’modern” lifestyle marked by standard products and consumption patterns world-wide.”) SIS6 F06

  4. Levitt: The Globalization of Markets ”Of course, large companies operating in a single nation or even a single city don’t standardize everything they make, sell, or do……..But although companies customize products for particular market segments, they know that success in a world with homogenized demand requires a search for sales opportunities in similar segments across the globe in order to achieve the economies of scale necessary to compete.” ”Such a search works because a market segment in one country is seldom unique; it has close cousins everywhere precisely because technology has homogenized the globe.” SIS6 F06

  5. Levitt: The Globalization of Markets "Different cultural preferences, national tastes and standards, and business institutions are vestiges of the past. Some inheritances die gradually: others prosper and expand into mainstream global preferences." (Chinese food and pita bread) "In fact the customers said they wanted certain features, but their behavior demonstrated they'd take other features provided the price and promotion were right." = "..never assume that the customer is a king who knows his own wishes." "What we see today as escalating commercial nationalism is simply the last violent death rattle of an obsolete institution." There are differences "But the global corporation accepts and adjusts to these differences only reluctantly…” SIS6 F06

  6. Forget about mass marketing ”In early 2000, the company’s new chairman and CEO, Doug Daft, announced a new ’think local, act local’ mind-set. This ends years of Coca-Cola’s marketing being strictly controlled form its Atlanta headquarters.” ”Coke’s mantra under Daft is to make connections with local people in a way that is relevant to them.” ””So far, we have created a world of Coke and invited people into it. Going forward, we will try to understand the world of people and provide the services and brands they need.”” (strategieseurope, February 2001) And don’t forget: ”So when the question comes up, why can’t we just use English? I always ask this question: do you think that consumers should make the effort to understand us, or should we be making the effort to be understood by them?” (Simon Anholt: Another One Bites the Grass, p.48) SIS6 F06

  7. Werther(1996) Youth culture + freed markets = competitive convergence The McDonald's Generation: "Music…has become a global language uniting successive generations from Santiago to Miami, Beijing to Moscow.." "..the largely English-speaking media have permeated the globe, molding an increasingly uniform teenage culture." The marginalization of grandparents as transmittors of cultural values. – Role to some degree taken over by technology. Traditional values and aspirations of family, health, and well-being are not being discarded, but we're witnessing the injection of new, widely agreed-upon values of freedom ……….the pattern is far from universal, but it is moving towards universality. ”Such a growing uniformity of culture results from billions of points of contact among young people and media every day.” SIS6 F06

  8. Werther Freed Markets: Free trade agreements etc. = economic growth  Governments giving up economic controls Competitive Convergence: "Instead they [people] will slowly emerge to reveal a world increasingly devoid of war, famine, bigotry, and oppression - because none of these conditions are particularly favorable for free trade…" "…as the drum grows louder, more people will march to its unifying beat.” SIS6 F06

  9. Pernod Pernod gives local operations and brands plenty of autonomy. To cater to local demand Pernod adapts its ad campaigns to each country and employs a large number of small local ad firms. The Pernod strategy makes it harder to cut costs through centralization and to control a brand’s image. Pernod is better able to adapt to the big differences in the way alcohol is consumed in different countries Diageo Believes in centralisation and standardisation. Hires fewer ad agencies and runs big, global campaigns. Local tastes: The Economist, 17 November, 2005. SIS6 F06

  10. Made for each other: The Economist, 22 October, 2005 ”Bharatmatrimony’s boss, Janakiram Murugavel, says that language is the biggest criterion. His site is divided into 15 linguistic sections. Then comes status and caste, which divides Indians at birth into thousands of groups. About 70% of his customers want to marry within their caste. Most still use astrology. Bharatmatrimony offers an online horoscope service.” SIS6 F06

  11. Burger and fries à la francaise: The Economist, 17 April, 2004 • ”Though it seems unlikely, France is the only place in Europe that has consistently loved McDonald’s since the first outlet opened there in 1979.” • ”And fast food would seem foreign in a society where a one (or two) hour break for lunch is still sacrosanct.” • ”McDonald’s was clever in adapting food and décor to local tastes and concentrating on children…” • ”The ham-and-cheese ”Croque McDo” is McDonald’s version of croque monsieur, a French favourite.” • ”McDonald’s teamed up with French companies to offer local fare, for instance fruit yoghurts…” SIS6 F06

  12. One-Toy-Fits-All: How Industry Learned to Love the Global Kid: Wall Street Journal 29 April, 2003 • ”Major toy makers are rethinking one of the basic tenets of their $55 billion global industry – that children in different countries want different playthings. The implications are significant for both kids and companies. • Two recent developments are changing kids’ tatses: 1: Rapid world-wide expansion of cable and satellite TV channels, which along with movies and the Internet expose millions of kids to the same popular icons. 2: The widening international reach of retailing giants such as Wal-Mart and Carrefour and Toys ’R’ Us. • But still: ”American kids want Nascar toy cars, while European kids want Formula One models. Cheerleader-themed anything is irrelevant outside the SIS6 F06

  13. The influence of culture on American and British advertising(Journal of Advertising Research, May/June 1996) • Standardization or adaption of beer advertising in the two countries? • Interesting because researchers often look at countries that are very different. • However, many people often overlook the subtle but important differences • The study compared the cultural variables reflected in advertising messages prepared in the US and GB: * If variables are similar: Standardize * If variables differ: Adapt SIS6 F06

  14. The influence of culture on American and British advertising The variables chosen by the researchers: 1.    American values a)    Individualism/independence b)   modernity/newness c)    achievement 2.    British values a)    affiliation b)   tradition/history c)    eccentricity 3) Rhetorical style 4) Advertising appeals 5) Occasion for product usage SIS6 F06

  15. Beer study: Hypotheses H1: A significantly greater number of American commercials reflect predominantly American cultural values than British commercials, specifically individualism/independence, modernity/newness, achievement  H2: A significantly greater number of British commercials reflect predominantly British cultural values than US commercials, specifically: Affiliation Tradition/history, Eccentricity H3: A significantly greater number of US commercials use direct speech, while a significantly greater number of British commercials use indirect speech. SIS6 F06

  16. Beer study: Hypotheses H4: A significantly greater number of US commercials employ emotional and sex appeal than British commercials H5: A significantly greater number of British commercials employ humor appeals than US commercials  H6: A significantly greater number of American commercials present the circumstances under which beer is consumed as a special occasion, while a significantly greater number of British commercials present the circumstances under which beer is consumed as a regular occasion SIS6 F06

  17. Beer study: Methodological Approach A combination of content analysis and semiology was used Content analysis: Its focus is normally limited to manifest content –      that which is apparent only at the surface level Semiotics (studying/interpreting signs and codes) Offers an interpretive perspective to the meaning buried deeper within the text. The weaknesses of semiotics: a)    heavily reliant on the ability of the individual analyst = suffers in its consistency and reliability b)   semiology is not easily quantifiable = difficult to obtain general conclusions c)    works better on some ads than others SIS6 F06

  18. Beer study: Sampling 1. Only ads created for domestic brewers of both countries were used 2. Ads must have been for the brand itself, not an event or contest sponsored by the brand 3. The ads must have been current Sample The American sample: 24 commercial for 12 brands The British sample: 38 commercials for 19 brands SIS6 F06

  19. Beer study: Results (%) USA UK Individualism/independence present 70.8 15.8 Modernity/newness 45.8 0 Achievement 70.8 10.5  Tradition/history 4.2 44.7  Eccentricity 4.2 81.6 Rhetorical style Direct speech 91.7 2.6 Rhetorical style Indirect speech 8.3 97.4 Dominant advertising appeal Emotional or sex 78.9 8.1 Humor 21.1 91.9 Occasion for product usage Regular 14.3 83.8 Special or not applicable/ product not shown in use 85.7 16.2 SIS6 F06

  20. Comparing the UK, Ireland and the U.S.(www.iol.ie/ressource/bates) UK Ireland U.S. I'm trying to return to a more simple way of life 32% 28% 46% Couples should live together before getting married 33% 37% 28% The man should be the boss of the house 18% 18% 29% Women should put their family before their career 54% 54% 58% SIS6 F06

  21. Comparing the UK, Ireland and the U.S. UK Ireland U.S. Advertising insults my intelligence 42% 23% 49% I'll try almost everything once 70% 63% 52% I like to look attractive to members of the opposite sex 51% 49% 68% It is important to me to make a lot of money 20% 42% 39% I feel I'm under a great deal of pressure most of the time 32% 28% 45% SIS6 F06

  22. Usunier, chapter 6 "Consumers are immersed in local marketing environments that tend progressively to converge.“ (p. 155) There are three major components of a local marketing environment that have a more or less direct influence on how marketing strategy can be defined an implemented: 1.   The general environment: political, legal, social, cultural, and linguistic elements. 2.   "Much nearer to the actual marketing decisions": marketing institutions and infrastructures: distribution, ad agencies, professional associations, regulatory bodies and how marketing regulations are enforced. 3.   Local marketing knowledge (often blatantly overlooked) – matters: if people, as employees, consumers or viewers, do not know, misunderstand and/or do not accept marketing concepts and practices, it is possible that strategies will be hard to implement. SIS6 F06

  23. Cultural differences and toys Ouch! There are other cultural differences. American parents want the top selling kids kitchen upgraded to include a TV on the worktop like most US homes. Meanwhile, the Spanish didn't like the packaging for the toy kitchen because it showed a young boy doing the cooking and the French didn't like the pink kitsch colors and demanded more realism." The Express, 6 December 2001 SIS6 F06

  24. Usunier, chapter 6 ”When trying to understand local marketing environments, self-criticism is a necessary perspective because we understand our local environment from our own ethnocentric perspective. There is always a reference point that makes judgements implicitly comparative.”…”If local people do not properly understand or appreciate the interviewing process in market research, a value judgement would be to say that they are underdeveloped and need to be educated.”(P. 155) Regional convergence/integration The role of e.g. the EU? The European consumer? Borrowed concepts and practices (p. 159) Interesting and relevant discussion Usunier e.g. is French SIS6 F06

  25. Usunier, chapter 6 ”Marketing infrastructures are converging, because the standards of the marketing profession are fairly constistent worldwide. Multinational companies have heavily influenced the widespread adoption of similar practices even if to some extent tailored to local environments.” (P. 203) SIS6 F06

  26. Usunier, chapter 8 – interesting points ”Consumer behaviour, a natural entry barrier related to culture, will diminish very gradually and only over a long period: there are still many very different marketing ’villages’, not a global one.” (P. 218) ”The trends towards global markets differ fairly widely depending on the industry. ” (P. 219) ”Cultural products which build on fairly universal feelings and ways of being are the ones to which standardized marketing policy can be applied.” (p. 231) SIS6 F06

  27. Usunier, chapter 8 – interesting points ”In fact, international marketing programmes have experienced a trend towards greater standardization, but this needs to be differentiated, according to: (1) the elements of the marketing mix considered; (2) the type of market, e.g. developed or undeveloped; (3) type of product; consumer or industrial; (4) the control exerted over e.g. subsidiary.” (p. 230) ”Globalization is a process which occurs mainly at the competition level. Artificial entry barriers, related to duties and standards, are now being progressively replaced by natual entry barriers related to scale and experience. For international marketing, culture-related experience is all the more important since the natural entry barriers relating to consumer behaviour and marketing environments will diminish very gradually and only in the long term.” (p. 231) SIS6 F06

  28. Usunier, chapter 8 Cultural affinity zones: "Geography based" Correspond to a large extent to national cultural groups. Cultural affinity classes: People within a cultural affinity class…”have a tendency to share common values, behaviour and interets, and tend to present common traits as a consumer segment; their lifestyles converge world-wide irrespective of national borders. As such, we see lifestyle convergence in teenagers in Europe who spend time watching MTV.” (P. 232) "Cultural affinity classes…….are probably an ideal means of defining an international target for standardized products."(p. 233) SIS6 F06

  29. The de Mooij text: Convergence and divergence in consumer behavior… Some points for discussion 1: • ”His [Levitt} argument was based on the assumption that consumer behaviour is rational. Increasingly, however scholars find that consumers are often not rational and do not make purchase decisions that maximise utility. The assumption of rationality is increasingly regarded as unrealistic and places consumers outside a cultural context.” • ”Although there is evidence of converging economic and demographic systems in Europe, there is no evidence of converging value systems. On the contrary, there is evidence that consumer behaviour is diverging in Europe as reflected in the consumption, ownership and use of many products and services.” SIS6 F06

  30. The de Mooij text: Convergence and divergence in consumer behavior… Some points for discussion 2: • ”The assumption that economic systems homogenisation will lead to homogenisation of consumer behaviour is supported only by anecdotal evidence.” • ”As people become more affluent, their diverge.” • ”Global advertising, however, does not appeal to universal values because there are no universal values.” • ”The model developed by Hofstede explains most of the variation of consumption and consumer behaviour across countries and enables marketing executives to quantify the effects of culture.” ????? SIS6 F06

  31. Values Values are the basis for segmentation and positioning decisions.  All people everywhere possess the same values to different degrees (Rokeach) Two levels of values (Rokeach): 1. Terminal (end-states): e.g. freedom, equality, self-respect 2. Instrumental (motivators to reach end-states): ambitious, cheerful, forgiving.  Some values may change over the long term  Age and point in time of people's lives can cause value differences (de Mooij) SIS6 F06

  32. Values ”Values offer an opportunity to differentiate brands by going beyond a focus on attributes and benefits, or the deliverance of higher-level consequences to consumers.” Modern advertising strategy development includes: • Selecting values or end-states to emphasize in advertising. • Determining how advertising will connect the product to key end-states • Developing advertisements connecting the product to the end value. (de Mooij) SIS6 F06

  33. Rokeach - values Intrumental values (motivators) Terminal values (end states) Ambitious A comfortable life Broadminded An exciting life Capable A sense of accomplishment Cheerful A world at peace Clean A world of beauty Courageous Equality Forgiving Family security Helpful Freedom Honest Happiness Imaginative Inner harmony Independent Mature love Intellectual National security Logical Pleasure Loving Salvation Obedient Self-respect Polite Social recognition Responsible True friendship Self-controlled Wisdom SIS6 F06

  34. Value structure maps –A VSM links the product’s attributes and benefits to values Toothpaste – an example Values security self-confidence Consequences/ prevents clean, white teeth benefits cavities Attributes sugarless strong SIS6 F06

  35. Value structure maps– Corona Extra, Germany (de Mooij) SIS6 F06

  36. Value structure maps– Corona Extra, Spain (de Mooij) SIS6 F06

  37. Cross-cultural value researchproblems(de Mooij) Research reflects values/culture of the researcher Differences in rankings of priorities of values Terminal values of one culture may be instrumental in other cultures Certain values of one culture may not exist in another culture Until recently mainly been based on U.S. tools SIS6 F06

  38. Values, lifestyles and psychographics"the softer side of science" Values are beliefs that a specific mode of conduct or end-state is personally or socially preferable to an opposite or converse mode of conduct or end-state of existence. Lifestyle is an exhibited set of shared values of tastes Or Lifestyle is the manner in which people conduct their lives, including their activities, interests and opinions. Psychographics: the concept of dividing markets into segments on the basis of consumer lifestyles, attitudes and interests. (Kahle & Chiagouris: Values, Lifestyles and Psychographics) SIS6 F06

  39. Emotional appeals ”Emotional appeals relate to the customers’ social and/or psycological needs for purchasing a product or service. Many of consumers’ motives for their purchase decisions are emotional, and their feelings about a brand can be more important than knowledge of its features or atributes.” Personal states or feelings Social-based feelings Safety Security Recognition Love Affection Status Happiness Joy Respect Nostalgia Sentiment Involvement Excitement Arousal Embarrassment Sorrow/grief Pride Affiliation/belonging Achievement Self-esteem Rejection Actualization Pleasure Acceptance Ambition Comfort Approval (Belch & Belch, Advertising and Promotion) SIS6 F06

  40. Some major motives for consumption Power/masculinity/virility Security Eroticism Moral purity-cleanliness Social acceptance Individuality Status Femininity Reward Master over environment Try to imagine different cultures and products affiliated with the different motives. (Adapted from Solomon: Consumer Behavior) SIS6 F06

  41. de Mooij’s ”Value Paradoxes” "Paradoxial values are found within cultures and between cultures. Every culture has its opposing values." "Value paradoxes are part of people's systems; they reflect the desirable versus the desired in life. On the one hand, one should not sin; on the other hand most of us do sin now and again. We don't want to be fat, we should eat healthy food, yet we do eat chocolate or drink beer and we do get fat.” ”Because the important value paradoxes vary by culture, value-adding advertising cannot be exported from one culture to another.” (de Mooij, Global Marketing and Advertising, p. 2) SIS6 F06

  42. de Mooij’s ”Value Paradoxes” VPs must be understood or you delude yourself and think that the world is becoming one global culture with similar values. VPs reflect the desirable versus the desired in life USA: freedom/belonging Germany: freedom/order Holland: freedom/affiliation France: freedom/dependence De Mooij: understanding and using the VPs of individual cultures = effective marketing communications SIS6 F06

  43. Some of the ”problems” in global marketing The "Think global, act local" paradox (You are always product of your own culture) The technology paradox (Technology hasn’t led towards similar needs for similar products) The media paradox (Technology hasn’t meant increased viewer freedom) The culture-free versus culture-bound paradox (There are no culture-free products) Local markets are people, global markets are products (Many global advertisers are not market oriented, they are product oriented) SIS6 F06

  44. Some of the ”problems” in global marketing The paradoxes in marketing (Marketing practice and theory often based on U.S. values and thinking) Focus on the individual (Traditionally focus has been on the individual) Effective advertising needs a shared culture (If buying motives for standardized products vary by country, how can a standardized campaign be equally effective in all countries?) The research paradox (Value and lifestyle research is culture-bound, but studies and techniques are often exported”) How advertising works (de Mooij) SIS6 F06

  45. Remember SIS-4? We briefly touched upon postmodern marketing ”As Firat, [describing the postmodern existence], rightly observes, ’In an overwhelmingly marketized existence, individuals experience practically all aspects of their lives as consumers’. Whereas consumption was not always highly regarded in modern consumption, the postmodernist consumer pursues, with little afterthought, the construction of their self-image.” ”Because the postmodern consumer experience is not one of committing to a single way of being, a single form of existence, the same consumers are willing to sample the different, fragmented artifacts. The consumer is ready to have Italian for lunch and Chinese for dinner, to wear Levi’s 501 blue jeans for the outdoor party in the afternoon and to try the Gucci suit at night – changing not only diets and clothes but also the personas and selves that are to be (re)presented at each function.” (Firat in Usunier & Lee, p. 136) SIS6 F06

  46. Remember SIS-4? We briefly touched upon postmodern marketing ”Consumption is no longer just about a simple purchase or the satisfaction of basic needs and wants, but a culturally determined behavioral pattern which forces us to choose and change the elements of our lifestyle.” ”…and it is first of all through our way of consuming that we define ourselves as individuals.” (Frandsen, Johansen & Nielsen, 1997, p. 7) SIS6 F06

  47. Remember SIS-4? We briefly touched upon postmodern marketing Post-modern marketing: • De-differentiation – e.g. the blurring of ”fine culture” and ”mass-culture” (e.g. advertisng.) And, marketing not only used commercially. • Fragmentation – e.g. we all play different roles, e.g. during the day. • Today consumers play important roles in shaping their own lifestyles so marketers have to take part in the process where the consumers try to choose lifestyles. For marketers it is no longer enough just to ”learn”, they have to get ”involved”. SIS6 F06

  48. Firat & Christensen: Marketing Communications in a Postmodern World ”Rather than converging towards a single mode of being or living that is deemed to be the best, as envisioned by the project of modernity, postmodernity allows for the recognition that various communities will have preferences for different ways of being and living, and that these preferences most likely will be shaped by a multiplicity of goals and values.” & ”The postmodern sensibility, in other words, does not envision the posibility of consensus on any foundational or fundamental essentials representing ’a universal.’ Instead, a multiplicity of perspectives, truths, and life experiences are sought and expected.” (Kimmel, Allan J. (ed.): Marketing Communication, Oxford University Press 2005) SIS6 F06

  49. Firat & Christensen: Marketing Communications in a Postmodern World Some of the conditions of postmodern culture: Hyperreality: …the becoming real of that which was or is hype or simulation; that is, when a substantive and powerful segment in society believe certain conditions that are forcefully represented to be the case, these conditions then become their reality. E.g. when a group of young people believe that wearing athletic shoes of a certain brand will bring them popularity, it indeed becomes the case.” Fragmentation: …the condition that life is disconnected or disjointed. Home life, work life, recreation time, tv time, time with pets etc. are all separate experiences and lack a center of unity. Decentering of the subject: …is the condition in modern life that the subject (the human agent), who was considered to be the center of all reason, has lost his/her agency, and has to share the capability to act upon things with objects (of desire), or is often acted upon by objects. An obvious example is the influence of objects such as television or the automobile on human beings. SIS6 F06

  50. Firat & Christensen: Marketing Communications in a Postmodern World Some of the conditions of postmodern culture: Paradoxical juxtaposition of opposites: …is the condition that many so-called ’proper’ ensembles are no longer exercised. This is a condition that is especially recognized in architecture, where architectural elements from different systems considered to be incompatible are combined, but is also found in everyday clothing and liftstyles, for example, in the combined use of punk hairdos with high-fashion clothing. Tolerance for difference and multiplicity: There is a tacit understanding among peoples of the world who realize the futility of seeking a consensus among all different perspectives, values, and worldviews, and instead accept an openness toward a multicultural existence. SIS6 F06

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