Chapter 13 Cross-Cultural Consumer Behavior: An International Perspective LEARNING OBJECTIVES After reading, studying and analyzing this chapter, students should be able to understand: 13.1How to study the values and customs of different cultures in order to develop effective marketing strategies. 13.2How to decide whether to customize products for global markets or to sell standardized ones. 13.3How to identify global marketing opportunities. 13.4How to apply psychographics to segmenting multinational markets. CHAPTER SUMMARY Learning Objective 13.1: To understand how to study the values and customs of different cultures in order to develop effective marketing strategies. Within the scope of consumer behavior, cross-cultural analysis is defined as determining to what extent the consumers of two or more nations are similar or different. Such analyses can provide marketers with an understanding of the psychological, social, and cultural characteristics of the foreign consumers they wish to target, so that they can design effective marketing strategies for the specific national markets involved. An understanding of the similarities and differences that exist between nations is critical to the multinational marketer who must devise appropriate strategies to reach consumers in specific foreign markets. Some of the problems involved in cross-cultural analysis include differences in language, consumption patterns, needs, product usage, economic and social conditions, marketing conditions, and market research opportunities. Acculturation is the process by which marketers learn—via cross-cultural analysis—about the values, beliefs, and customs of other cultures and apply this knowledge to marketing products internationally. Learning Objective 13.2: To understand how to decide whether to customize products for global markets or to sell standardized ones. The greater the similarity between nations, the more feasible it is to use relatively similar marketing strategies in each nation. When the cultural beliefs, values, and customs of specific target countries are found to differ widely, then a highly individualized marketing strategy is indicated for each country. In deciding whether or not to customize products to local cultures, marketers must consider local values, linguistic barriers, and legal issues. Learning Objective 13.3: To understand how to identify global marketing opportunities. Firms are increasingly selling their products worldwide, for a variety of reasons. Many firms have learned that overseas markets represent an important opportunity for their future growth when their home markets reach maturity. This realization is propelling them to expand their horizons and seek consumers in markets all over the world. Moreover, consumers around the globe are eager to try “foreign” products that are popular in different and far-off places. As increasing numbers of consumers come in contact with the material goods and lifestyles of people living in other countries, and as the number of middle-class consumers grows in developing countries, marketers are eager to locate these new customers and offer them the products. Learning Objective 13.4: To understand how to apply psychographics to segmenting multinational markets. Global psychographic research often reveals cultural differences of great importance to marketers. Psychographics identifies shared values, irrespective of national borders. Much of this research has sought to uncover the bedrock values in peoples’ lives, in order to understand the motivations that drive both attitudes and behavior. The VALS research methodology has been used to identify psychographic segments in other countries. CHAPTER OUTLINE INTRODUCTION 1.A world brand is manufactured, packaged and positioned exactly the same way regardless of the country in which it is sold. 2.A global marketing strategy consists of selling the same product using the same positioning approach and communications globally. 3.A local marketing strategy consists of customizing both the product and the communications program for each unique market. 4.Hybrid marketing strategies standardize the product or the advertising message (but not both) while customizing the other one. *****Use Key Terms world brand, global marketing strategy, local marketing strategy, hybrid marketing strategies Here; Use Figure #13.1 Here; Use Table 13.1 Here***** Cross-Cultural Analysis and Acculturation 1.Cross-cultural analysis is defined as determining to what extent the consumers of two or more nations are similar or different. a.This type of analysis provides marketers with an understanding of the psychological, social and cultural characteristics of the foreign consumers they wish to target. b.The increased understanding enables the design of effective marketing strategies for specific national markets. c.Research issues that should be considered include: i.Differences in language and meaning ii.Differences in market segmentation opportunities iii.Differences in consumption patterns iv.Differences in the perceived benefits of products and services v.Differences in the criteria for evaluating products and services vi.Differences in economic and social conditions and family structure vii.Differences in marketing research and conditions viii.Differences in marketing research possibilities d.Marketers want to know how consumers in two or more societies are similar and how they are different. i.Countries like China and Mexico are collectivistic (we) cultures ii.Countries like the U.S. and the U.K. are individualistic (I) cultures iii.Collectivists rely more on word-of-mouth iv.Individualists attach more importance to explicit and implicit promises and third parties e.The greater the similarity between nations, the more feasible it is to use relatively similar marketing strategies in each nation. *****Use Learning Objective 13.1 Here; Use Key Term cross-cultural analysis Here; Use Tables 13.2 and 13.3 Here; Use Review and Discussion Question #13.3 Here; Use Hands-on Assignments #13.13, #13.15 Here ***** f.A study in four countries (U.S., U.K., France, Germany) identified differences in consumer style and segmented consumers into four clusters: i.Price-sensitive consumers ii.Variety-seeking consumers iii.Brand-loyal consumers iv.Information-seeking consumers ***** Use Tables 13.4 and 13.5 Here***** 2.There are several frameworks for assessing consumption-related cultural differences. a.One study identified the dimensions that cross-cultural studies should address: i.Judgments regarding the quality of a country’s products ii.Willingness to buy a country’s products iii.Ethnocentrism—willingness to buy foreign-made products iv.Perceptions of a country’s consumption culture v.Acculturation—identification with a country’s culture vi.Ethnic self-identification vii.National self-identification b.Another study identified the following relevant dimensions for measuring the interrelationship between consumers’ attitudes toward local and global products: i.Entertainment ii.Furnishings iii.Food iv.Lifestyles v.Brands c.Another study identified personal cultural orientations that can be used in cross-cultural measurement. i.Independence ii.Interdependence iii.Power iv.Social Inequality v.Risk Aversion vi.Ambiguity Tolerance vii.Masculinity viii.Gender Equality ix.Tradition x.Prudence xi.Consumer Ethnocentrism xii.Consumer Innovativeness ***** Use Review and Discussion Questions #13.8 and #13.9 Here ***** 3.Marketers need to go through an acculturation process, learning everything that is relevant to their product usage in the foreign countries in which they plan to operate. a)Marketers must thoroughly orient themselves to the values, beliefs, and customs of the new society. b)Marketers must persuade the members of that society to modify or break with their own traditions. *****Use Key Term acculturation Here ***** 4.It is often difficult for a company planning to do business in foreign countries to undertake cross-cultural consumer research. a.It is hard to conduct Western-style market research in the Islamic countries of the Middle East. b.In many countries there is a limited amount of information regarding consumer and market statistics. c.Scales of measurement are not adequate. d.Research facilities may not be available. e.To avoid research measurement problems, consumer researchers should i.Familiarize themselves with the research services in the countries where they are evaluating markets and learn to design marketing research studies that will yield useful data. ii.Keep in mind that cultural differences may make “standard” research methodologies inappropriate. Localization versus Standardization 1.Marketers can adapt their offerings in other nations or market them the same way they do at home. *****Use Learning Objective #13.2 Here ***** 2. Some companies customize their products or services for local cultures. 3.Some companies have failed by assuming the needs of another culture would be the same as the needs in their original market. 4.Many American brand names and slogans must be revised or changed in non-English speaking countries. a)Linguistic differences may be the most challenging factor facing companies that are expanding globally. b)Many companies have made errors with their translations. c)A genuine Chinese name can say a lot about a product’s characteristics and result in consumer attachment to the brand. ***** Use Review and Discussion Questions #13.6 and #13.7 Here ***** 5.Promotional appeals must reflect the local culture’s values and priorities. a)Countries differ in responses to humorous appeals and sexual appeals. b)Countries differ in responses to individualistic and collectivistic ad appeals. c)Comparative advertising has been used more in the United States than in other countries, but comparative ad persuasiveness hinges on: i)Self-construal (how individuals perceive, comprehend, and interpret the world around them) ii)Need for cognition *****Use Key Term self-construal Here; Use Review and Discussion Questions #13.5 and #13.6 Here ***** 6.Sometimes, local laws force American marketers to alter their offerings. 7.World brands are those products that are manufactured, packaged, and positioned the same way regardless of the country in which they are sold. a)Marketers of products with a wide or almost mass-market appeal have embraced a world branding strategy. b)Still other marketers selectively use a world branding strategy. c)Consumers associate global brands with three characteristics: i)Quality Signal ii)Global Myth iii)Social Responsibility d)Intracountry segments (with respect to how a country’s citizens view global brands) include: i)Global Citizens (55%) ii)Global Dreamers (23%) iii)Antiglobals (13%) iv)Global Agnostics (8%) *****Use Figure #13.2 Here; Use Tables 13.6 and 13.7 Here***** 8.Just because a brand may be global in character does not mean that consumers around the world will necessarily respond similarly to a brand extension. Global Marketing Opportunities 1.Firms are increasingly selling their products worldwide, for a variety of reasons. a.There has been an ongoing buildup of “multinational fever.” b.The general attractiveness of multinational markets, products, or services originating in one country means that they are increasingly being sought out by consumers in countries in other parts of the world c.Many firms have learned that overseas markets represent an important opportunity for their future growth when their home markets reach maturity. d.Consumers around the globe are eager to try “foreign” products that are popular in different and far-off places. 2.Global markets are dynamic and new marketing opportunities emerge continuously. 3.The most important criterion for identifying global marketing opportunities is a country’s consumer spending and its growth prospects. *****Use Learning Objective #13.3 Here; Use Figures #13.3 and #13.4 Here; Use Figures #13.5A-D Here; Use Review and Discussion Questions #13.1, #13.10, #13.11 and #13.12 Here***** 4.The middle class is expected to grow from 30% to 52% of the world’s population by 2020. a.By 2025, China will have the world’s largest middle class. b.By 2025, India’s middle class will be 10 times larger than it currently is. c.Although a growing middle class provides a market opportunity, it should always be remembers that the same product may have different meanings in different countries. 5.The global teen market appears to have similar interests, desires, and consumption behavior no matter where they live. a.Less highly developed nations are different from high developed nations with respect to teen fashion consciousness. b.The coolest teens, Creatives, represent 30% of all teenagers and were found in all studied countries, with a high concentration in Western Europe. *****Use Table #13.9 Here; Use Review and Discussion Question #13.2 Here ***** Cross-Cultural Segmentation 1.Global “sameness” allows marketers to launch similar styles and/or use global advertising in some cases. 2.Some countries require different lifestyle segmentation. a.In Japan, businesses use the Japan-VALS framework to monitor Japan’s consumer environment; generate new product ideas; segment Japanese consumers into potential target markets; differentiate brands; and develop effective pricing, distribution, and promotional strategies. 3.The Japan-VALS segments stem from consumers’ primary motivations and degree of innovativeness, where innovativeness is measured as attitudes toward social change. Primary motivations include tradition, achievement, and self-expression. 4.Roper Starch Worldwide interviewed 35,000 consumers in 35 countries in order to identify shared values, irrespective of national borders. a.The research sought to uncover the bedrock values in peoples’ lives so as to understand the motivations that drive both attitudes and behavior. b.After completing the interviews in North and South America, Asia, and Europe, six global value groups were uncovered: i.Strivers—ambitious and materialistic. ii.Devouts—responsible, respectful, and conservative. iii.Altruists—unselfish in their concern for others, society, and the future. iv.Intimates—focus on social relationships and family. v.Fun Seekers—young in age and outlook, value adventure and good times. vi.Creatives—seek knowledge and insight, and have a keen interest in books and new media. *****Use Learning Objective #13.4 Here; Use Hands-on Assignment #13.4 Here ***** Chapter 14 Consumer Decision-Making and Diffusion of Innovations LEARNING OBJECTIVES After reading, studying and analyzing this chapter, students should be able to understand: 14.1The consumer’s decision-making process. 14.2The dynamics of buying gifts. 14.3How innovative offerings gain acceptance within market segments and how individual consumers adopt or reject new products and services. CHAPTER SUMMARY Learning Objective 14.1: To understand the consumer’s decision-making process. Not all consumer decision-making situations require the same degree of information research. Extensive problem solving occurs when consumers have no established criteria for evaluating an item within a product category. Limited problem solving occurs when consumers have established the basic criteria for evaluating the product category, but need more information to decide among the brands and product models available. Routinized response behavior occurs when consumers have experience with the product category and the brands offered and buy items often and almost instinctively. A model of consumer decision-making ties together the consumption behavior discussed throughout this book. It includes three components: input, process, and output. Learning Objective 14.2: To understand the dynamics of buying gifts. Gifts represent more than ordinary, everyday purchases, because they are symbolic, and mostly associated with important events. Gifting behavior is a gift exchange that takes place between a giver and a recipient. The definition is broad in nature and embraces gifts given voluntarily, as well as gifts that are an obligation. It includes gifts given to (and received from) others and gifts to oneself (self-gifts). Moreover, the majority of products that we refer to as “gifts” are in fact items that we purchase for ourselves. Learning Objective 14.3: To understand how innovative offerings gain acceptance within market segments and how individual consumers adopt or reject new products and services. Diffusion of innovations is the macro process by which the acceptance of an innovation (i.e., a new product, service, idea, or practice) takes place among members of a social system (or market segments), over time. This process includes four elements: (1) the innovation (new product, model, service); (2) the channels of communication (informal or formal, impersonal or personal groups); (3) the social system (a market segment); and (4) time. In contrast, the innovation adoption process is a micro process that focuses on the stages through which an individual consumer passes when deciding to accept or reject a new product. CHAPTER OUTLINE Introduction 1.This chapter integrates the concepts discussed in previous chapters into a framework that illustrates how consumers make buying decisions. 2.Three types of problem solving are introduced: a)Extensive problem solving applies when the purchase is infrequent and the consumer has no established criteria for evaluating a high involvement product. b)Routinized response behavior applies when consumers have experience and do not need to establish criteria to evaluate a low risk product. c)Limited problem solving applies when consumers purchase updated versions of products they have bought before, which often have additional features. *****Use Key Terms extensive problem solving, limited problem solving, and routinized response behavior Here; Use Figures #14.1 and #14.2 Here; Use Review and Discussion Question 14.2 Here***** Consumer Decision-Making Model 1.The consumer decision-making model includes three components: input, process and output. *****Use Learning Objective #14.1 Here; Use Figure #14.3 Here***** a)The input component include three types of external influences: i)The marketing mix. ii)The sociocultural influences. iii)Communications, which are the mechanisms that “deliver” the marketing mix and sociocultural influences to consumers. b)The process component of the model is concerned with how consumers make decisions. i)The model’s psychological field consists of the internal influences (motivation, perception, learning, personality, and attitudes) that affect consumers’ decision-making processes (what they need or want, their awareness of various product choices, their information-gathering activities, and their evaluation of alternatives). ii)The first of the three stages in the process part of the model is need recognition, which occurs when a consumer is faced with a “problem.” a)Some needs are actual state types, who perceive that they have a problem when a product fails to perform satisfactorily. b)Some needs are desired state types, for whom the desire for something new may trigger the decision process. iii)Pre-purchase search begins when a consumer perceives a need that might be satisfied by the purchase and consumption of a product. a)Sometimes recalling past purchases provides the consumer with adequate information to make the present choice. b)When the consumer has had no prior experience, he or she may have to engage in an extensive search of the outside environment for useful information on which to base a choice. *****Use Key Terms need recognition, pre-purchase search Here; Use Table #14.1 Here***** iv)The three major contextual factors that have been researched for their effects on pre-purchase search are: a)Task Complexity – the number of alternatives and amount of information available for each alternative. b)Information Organization – the presentation, format, and content. c)Time Constraint – the amount of time the consumer has to decide. v)Within the context of consumer decision-making, the evoked set (consideration set) refers to the specific brands (or models) a consumer considers in making a purchase within a particular product category a)An inept set consists of brands (or models) that the consumer excludes from purchase consideration because they are unacceptable (or they are seen as inferior). b)An inert set consists of brands (or models) the consumer is indifferent toward because they are perceived as not having any particular advantages. c)The evoked set consists of the small number of brands the consumer is familiar with, remembers, and finds acceptable. *****Use Key Terms evoked set, inert set, inept set Here; Use Figure #14.4 Here***** vi)Companies sometimes advertise in a way that recommends the criteria consumers should use to assess product or service options. vii)Three factors that affect a brand’s credibility are: a)the perceived quality of the brand b)the perceived risk associated with the brand c)the information costs saved with that brand (due to the time and effort saved by not having to shop around) viii) Decision rules are procedures that consumers use to facilitate brand (or other consumption-related) choices. a)These rules reduce the burden of making complex decisions by providing guidelines or routines that make the process less taxing. b)Compensatory decision rules come into play when a consumer evaluates brand or model options in terms of each relevant attribute and computes a weighted or summated score for each brand - the assumption is that the consumer will select the brand that scores highest among the alternatives evaluated. c)Noncompensatory decision rules do not allow consumers to balance positive evaluations of a brand on one attribute against a negative evaluation on some other attribute, and include: (1)conjunctive decision rules (2)lexicographic decision rules d)Consumers may also use the affect referral decision rule, in which the consumer selects the brand with the highest perceived overall rating (the simplest of all rules). *****Use Key Terms compensatory decision rules, noncompensatory decision rules, conjunctive decision rule, affect referral rule, lexicographic decision rule Here; Use Table #14.2 Here; Use Review and Discussion Question #14.3 Here***** ix)The consumer segment and the specific shopping rules that these segments employ are: a)Practical Loyalists—those who look for ways to save on the brands and products they would buy anyway. b)Bottom-Line Price Shoppers—those who buy the lowest-priced item with little or no regard for brand. c)Opportunistic Switchers—those who use coupons or sales to decide among brands and products that fall within their evoked set. d)Deal Hunters—those who look for the best bargain and are not brand loyal. x)Missing information may result from advertisements or packaging that mention only certain attributes, the consumer’s own imperfect memory of attributes for no present alternatives, or because some attributes are experiential and can only be evaluated after product use. a)Consumers may delay the decision until missing information is obtained. b)Consumers may ignore missing information and decide to continue with the current decision rule using the available attribute information. c)Consumers may change the customarily used decision strategy to one that better accommodates missing information. d)Consumers may infer (“construct”) the missing information. c)Consumers make three types of outputs/purchases. i)When a consumer purchases a product (or brand) for the first time and buys a smaller quantity than usual, the purchase is a trial. ii)A trial is the exploratory phase of purchase behavior in which consumers attempt to evaluate a product through direct use. iii)When a new brand in an established product category is found by trial to be more satisfactory or better than other brands, consumers are likely to repeat the purchase. iv)Repeat purchase behavior represents brand loyalty, which most firms try to encourage because it contributes to greater stability in the marketplace. v)Post-purchase evaluation occurs after consumers have used the product, and in the context of their expectations. a)When a product’s performance matches expectations, consumers feel neutral. b)Positive disconfirmation of expectations occurs when the product’s performance exceeds expectations and the consumer is satisfied. c)Negative disconfirmation of expectations occurs when performance is below expectations and the consumer is dissatisfied. vi)Cognitive dissonance occurs when tension arises after a purchase decision. a)Consumers try to reassure themselves that they made wise choices to resolve the tension. b)In doing so, they may (1)rationalize the decision as being wise (2)seek advertisements that support their choice and avoid those of competitive brands (3)attempt to persuade friends or neighbors to buy the same brand (and thereby confirm their own choice) (4)turn to other satisfied purchasers for reassurance. *****Use Key Terms positive disconfirmation of expectations, negative disconfirmation of expectations, brand loyalty, cognitive dissonance Here; Use Review and Discussion Questions #14.4 and #14.5 Here; Use Hands-on Assignment #14.9 Here***** Consumer Gifting Behavior 1.Gifting behavior is the process of gift exchange that takes place between a giver and receiver. a)It includes gifts given to (and received from) others and gifts to oneself, or self-gifts. b)Gifting is symbolic communication with implicit and explicit meanings. 2.One of the models of gifting reveals the following five gifting subdivisions: a)Intergroup gifting occurs when one group exchanges gifts with another. b)Intercategory gifting is an individual giving a group a gift, or a group giving an individual a gift. c)An intragroup gift is a gift that a group gives itself. d)Interpersonal gifts occur between two individuals. e)An intrapersonal gift occurs when the giver and the receiver are the same individual (a self-gift). *****Use Key Learning Objective 14.2 Here; Use Key Terms gifting behavior and self-gifts Here ***** Diffusion and Adoption of Innovations 1.Consumer acceptance of new products and services is studied from the macro research perspective known as the diffusion of innovations. 2.The process includes four elements: a)The innovation b)The channels of communication c)The social system d)Time 3.The innovation adoption process is a micro process that focuses on the stages through which an individual consumer passes when deciding to accept or reject a new product. *****Use Key Terms diffusion of innovations and adoption process Here; Use Learning Objective #14.3 Here***** 4.There is no universally accepted definition of the terms product innovation or new product. 5.Many marketers classify new products into three categories reflecting the extent to which they require consumers to change existing consumption or buying patterns: a)Continuous innovation, which is the least disruptive to consumer patterns. b)Dynamically continuous innovation, which, although not altering established behavior patterns, is somewhat more disruptive. c)Discontinuous innovation, which requires consumers to adopt new behavior patterns. *****Use Key Terms innovation, continuous innovation, dynamically continuous innovation, and discontinuous innovation Here; Use Figure #14.2 Here; Use Review and Discussion Question #14.6 Here***** 6.Researchers have identified five product characteristics that seem to influence consumer acceptance of new products: a)Relative advantage—degree to which potential customers perceive a new product as superior to existing substitutes. b)Compatibility—degree to which the customer feels the new product is consistent with their present needs, values, and practices. c)Complexity—degree to which a new product is difficult to understand or use. Complexity is especially important in dealing with technological fear. d)Trialability—degree to which a new product is capable of being tried on a limited basis. e)Observability—ease with which a product’s benefits or attributes can be observed, imagined, or described to potential consumers. *****Use Discussion Question #1 Here; Use Review and Discussion Question #14.7 Here; Use Hands-on Assignment #14.8 Here***** 7.The focus of the adoption process is the stages through which an individual consumer passes in arriving at a decision: to try or not to try; to continue using or to discontinue using a new product. 8.It is often assumed that the consumer moves through five stages in the adoption process in arriving at a decision to purchase or reject a new product: a)Awareness: The consumer first becomes aware that an innovation exists. b)Interest: The consumer becomes interested in the innovative product or service. c)Evaluation: The consumer undertakes a “mental trial” of the innovation. d)Trial: The consumer tries the innovation. e)Adoption: If satisfied, the consumer decides to regularly use the innovation or not use it again. 9.The adoption process is an oversimplification of the actual process. a)The process does not adequately acknowledge that quite often, consumers face a need or problem-recognition stage before acquiring an awareness of potential options or solutions (a need recognition preceding the awareness stage). b)The adoption process model does not adequately provide for the possibility of evaluation and rejection of a new product or service after each stage, especially after trial (i.e., a consumer may reject the product after trial or never use the product on a continuous basis). c)It does not explicitly include post-adoption or post-purchase evaluation, which can lead to a strengthened commitment or to a decision to discontinue use. *****Use Discussion Question #1 Here***** Instructor Manual for Consumer Behaviour Leon G. Schiffman, Leslie Lozor Konuk, S. Ramesh Kumar 9789332555099, 9780134734828
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