Cross-Cultural Variations in Consumer Behavior

Cross-Cultural Variations in Consumer Behavior

Copyright: © 2015 |Pages: 26
DOI: 10.4018/978-1-4666-7518-6.ch007
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Abstract

The global marketplace is getting congested with inter-market segmentation comprising consumers of various ethnic groups. Such attributes of markets have posed uphill challenges to the companies to develop marketing strategies that caters to the consumer preferences of varied cultural backgrounds. The cross-cultural variations often build discontentment among consumers as their preferences are not meticulously attended by the companies. This chapter defines culture and describes the cross-cultural drivers with a focus on cultural diversity, gender, society, and personality perspectives. The discussions in the chapter argue that the cultural interventions have become very subtle with the increasing market competition, and uniform marketing strategy does not cater to the cross-cultural consumer segments.
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Introduction

The concept of corporate culture has received widespread attention in the past several years as a strategic marketing management tool. Organization and consumer culture are symbiotic and serve as a mechanism for social control in doing business in a competitive marketplace. Thus, developing pro-consumer organizational culture is important for both the implementation of strategy to generate organizational commitment and trust among the consumers. The organizational culture and commitment result from systems of participation that rely on processes of incremental commitment (O’Reilly, 1989). International marketing encompasses people from different cultures and thus every business activity in another country is subject to cultural challenges. The extent of cultural influence varies in accordance with the nature of industrial and consumer products and services. Consumer Products, by virtue of their marketing process such as mass advertising, sales promotion and personal selling tend to require a strong degree of cultural awareness since this knowledge relates to the human communication in the selling process. On the contrary, industrial products may have lesser requirements for cultural awareness, as sometimes the negotiation in business to business or industrial marketing segment is based on a situation and does not depend on the cultural adaptation process. For example, the technical specifications for an industrial ceramic automotive component might be the same in New York as they are in Tokyo or Moscow. Under such circumstances what is important, to make this sale, is the price of the component and how it fits the specifications required by the component.

The traditional high esteem for the word in Europe is reflected in the elaborate business correspondence. Europeans not only love to talk extensively in negotiations, they also draw up long minutes of meetings and letters of confirmation. They strive to put the progress of their business in exact words in order to keep going. Japanese enterprises, on the other hand, are not especially fond of correspondence. Compared to European business letters, Japanese letters tend to be brief and, in the European view, sometimes not sufficiently precise. Even differences in detail of communication may cause problems in business relationships. In Europe, contracts as a principle are put in writing, and written contracts are minutely drafted. In this way one tries to provide for all conceivable problems of the contractual relationship in advance. In Japan, a 1987 survey revealed that in practice 71% of business contracts are concluded only orally. But even if Japanese contracts are put in writing, they are often only of a summary nature. In Europe such summary contracts will be of little use. For example, a German labor contract frequently comprises 10 pages. A Japanese company followed Japanese practice in Germany and concluded an employment contract with a German employee. For this reason alone, the Japanese company stood no chance of winning when it was sued by the employee before a German labor court. Sometimes there is the impression that Japanese enterprises do not readily enter into written contracts because they want to retain their freedom of action and flexibility in the future. According to traditional Japanese thinking, a good personal relationship between the parties reinforced by giri obligations is more important than a written contract. Giri is a moral obligation to loyalty incurred by a special favor which is borne by the beneficiary until he has satisfied it by a definite but unspecified act of gratitude (Rahn, 1990).

In order to sustain the competitive pressures, most international companies in the global marketplace are redesigning organizations and inculcating new organizational cultures that are developed on selling particular products and replacing them with new structures designed to be more responsive to customer needs. Globalization has induced companies to restructure organizational culture around customers than in the context of competing firms. Companies transitioning from product-oriented to customer-centered organizations progress along a cultural change continuum. They begin with informal coordination to overcome the deficiencies of product attributes, adding integrating functions such as social media communication and corporate communications, as needed. The market logic for becoming customer focused organization is often compelling and organizational culture can be developed by fixing accountability for customer and sharing the information. However, transforming product-centered cultures can be difficult as the potential benefits do not necessarily translate into superior performance (Day, 2006).

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