The first two chapters of this paper will deal with the conception of culture and refer to the empirical value researches of Geert Hofstede and Milton Rokeach. Such analyses would identify increased marketing opportunities that would benefit both international marketers and their targeted consumers. In Marketing in a multicultural world, edited by Janeen A. Costa and Gary J. Bamossy , 26-67. Cross-Cultural Consumer Behavior: A Review of Research Findings Understanding of similarities and differences that exist between nations is critical to multinational marketer who must devise appropriate strategies to reach consumers in specific foreign markets. Culture has several important characteristics: Culture iscomprehensive. The spending patterns of a top economy like UK will be completely different then a developing nation. Today, many companies try to reach their target groups upon these results. 4. Comparisons are usually made by analyzing the statistical, typological and content aspects of cultures. Therefore, pushing the boundaries of cross-cultural consumer research to gain a better understanding of consumer behaviour in a multi-cultural environment has created both opportunities and challenges for today‟s marketers. The goal of this paper is to explain cultural diversity between the United States of America and Germany and its influence on consumer behavior. The cultural consumer describes a person who avidly consumes art, books, music, and live cultural events within a society. Too many marketers contemplating international expansion make the strategic error of believing that if its product is liked by local or domestic consumers, then everyone will like it. The smaller the power distance the more a country emphasizes these values. Especially in times of globalization and internationalization it is very important to develop effective marketing strategies for foreign markets, to define consumption motives, … Besides purchasing decisions, culture also affects how consumers use the products they buy and how they dispose of them. Second, to gain acceptance for a culturally new product in a foreign society, they must develop a strategy that encourages members of that society to modify or even break with their own traditions. The fact that the brand is foreign makes a difference in the consumer’s mind, sometimes favorable, sometimes not. (Schiffman et al., 2014) describes cross-cultural consumer analysis as “research to determine the extent to which consumers of two or more nations are similar in relation to specific consumption behaviour.” In today’s society, it is imperative that corporations actively seek to market their products internationally in order to take advantage of many opportunities and possible… Second many firms have learned that overseas markets represent the single most important opportunity for their future growth when their home markets reach maturity. The four possibilities that this decision framework considers range from a company incorporating a global strategy to developing a completely local strategy. As differences in verbal communication system across cultures are found such as the symbolic communications, multinational marketers must also take that into active consideration for success in other cultures. Erik Elinder notes that Europe has experienced a gradual breakdown in language and custom barriers due to media, migration, and tourism and suggests that advertising should be geared to all-European media rather than custom fitted for localities. Communication and advertising messages should then be adapted accordingly to the specific values of particular cultures. Few people go hungry and there is potential for upward mobility, especially at the top end of the upper middle class. Germans in contrast tend to avoid new situations and has a much higher uncertainty avoidance index. - High royalties for the sales Therefore it is important to understand where cultural values are settled, how they change and finally how market segmentation helps to identify them. There are five criteria that distinguish values from beliefs: they are (1) few in numbers, (2) serve as a guide for culturally appropriate behavior, (3) difficult to change and enduring, (4) tied to specific objects, (5) widely accepted by the members of society (Schiffmann, 2003). Differences in market segmentation opportunities. - Publication as eBook and book Definition: The Cultural Factors are the factors that an individual learns at a very early stage of life due to socialization within the family and other key institutions, such as the set of values, preferences, behavior patterns, and perceptions are learned as the individual grows. Example; Two nations may consume same product differently. Examples are Sony in the United States, Coca-Cola in Europe and Japan. In this there is a small, wealthy class of political leaders and foreign businessmen, but a predominantly illiterate and economically depressed population. Cross Cultural Consumer behavior 34. Differences in the criteria for evaluating of products and services. A firm might decide either to standardize or localize its product and either standardize or localize its communications program. Definition and Objectives of cross-cultural consumer analysis: To determine whether and how to enter foreign markets, marketers need to conduct some form of cross-cultural consumer analysis. In the middle there are two mixed strategies. Marketing techniques are ways used to make users aware of the fact that a particular product exists and a new product that was not previously in the market is launching. Cross-Cultural Consumer Behavior Framework (figure 1), which was inspired by a conceptual model by Manrai and Manrai (1996). While many aspects of human thought and behavior are universal, cultural differences can lead to often surprising differences in how people think, feel, and act. Generally, the recent trend in international marketing has veered away from segmentation toward greater standardization of markets. These include comparing love and courtship patterns and political power. Stage One: Local consumers have heard or read of a brand marketed elsewhere but cannot get it at home; a brand is “alien” and unavailable but may be desirable. Culture is contextually based! Thus it helps marketers to tailor their promotional programs on specific reference group. Culture and Consumer Behaviour 2. Cross-cultural consumer research is increasingly important and essential for the current globalized marketplace. Chapter 3 will present a broad-based concept of the German and American set of values and show how they drive consumer behavior. Their primary considerations are twofold: 1) the cultural values which will determine how a product is positioned and 2) cultural cues as to how a product may best be marketed. Example; The income, social class, age and sex of target customers may differ dramatically between two different countries. “The United States is, without a doubt, the most important country to understand, yet it is the most misunderstood country in the world” (“Release of the Special Issue of the USA 2002”, 2002). And where black and grey are considered as passive colors, red is definitely active. In fact, the issue is generally not whether to market a brand in other countries but rather how to do it. The marketer should study the nuances of cultural variances and respond in such a way which a consumer easily understands. Most aspects of consumer behavior are culture-bound. What is culture? Thousand Oaks, CA: Sage. 3.2 American Core Values Cross-cultural consumer analysis is defined as the effort to determine to what extent the consumers of two or more nations are similar or different. Varies from region to region and country to county: The consumer behaviour varies across states, … These value dimension were the first systematic empirical attempt to compare cultures on an aggregate, group level. Consumer behaviour is the study of the factors that influence people to purchase the product. Assignment on Cross-cultural Consumer Behavior and Multinational Strategies. In a cross cultural analysis of English, United States, Canadian, and Australian markets, Sommers and Kernan offer four strategies for expanding existing products into new markets. The second group was described as affluent, and includes the United States, Canada, and Holland. ... meaning that they include numerically significant pluralities of traditionally minority populations, or are already majority-minority. To write about the ”American” or “European” consumer might be challenging in some way, because the general theories about sociological or psychological influences on consumer behavior are common to all Western countries. Marketers must learn everything that is relevant to the product and product category in the society in which they plan to market, and then they must persuade the members of that society to break with their traditional ways of doing things to adopt the new product. People employ values and standards as criteria for evaluation as “good”, “bad”, “must” and ”ought”. Understanding a country’s mother tongue will be of immense help to the marketer to know the impact of culture on consumer behavior. Moreover consumers all over the world are increasingly eager to try “foreign” products that are popular in different and far-off places. As these values are not very consumption-specific or product-specific values, the following Chapter will explain some of the core values related to consumer behavior. Again the following table presents a framework that focuses on four marketing strategies available to a firm contemplating doing business on a global basis. Assignment on Select the Right Franchise Business, Discuss on Functions of the International Manager, South Asian Association for Regional Cooperation, Statistical:          what the demographics of a population are, Typological:       what cultural types may be identified, Content:              what kinds of values and norms people accept and live by. 1.1 Definition of Culture culture has a major impact on consumer behavior. 5.2 Marketing Mistakes – a Failure to Understand Differences. 4.2.4 Traditional milieus, 5 Trends & Mistakes During the next decades, as marketers enter new international markets, an … One group of countries was defined as almost classless and contented. Colors represent diverse meanings and aesthetics in different cultures. Both Germany and the US are masculine cultures. marketers should tailor thier marketing mixes to the Multinational marketers face the challenge of creating marketing and advertising programs capable of communicating effectively with a diversity of target markets. 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. It signifies the study of the complex buying activities that include purchasing, using, and discarding of the product. There are a great many cross-cultural variations in consumer behavior that are of particular interest to the marketer operating in more than one culture. The - Completely free - with ISBN Cross-cultural marketing is now table stakes. How culture acts as an “invisible hand” that guides onsumption-related ttitudes, values and behavior. Traditionally, anthropologists have used cross-cultural research to explore at wide variety of topics. how cultures contact! Recognizing the deficiency of definition of culture in cross-cultural studies, this paper presents a conceptualization of culture. 661 subjects representing different cultures were asked to indicate how they associate anger, envy, fear, and jealousy to a particular color. 4. It explains why some products sell well in certain regions or among specific groups, but not as well elsewhere. 3.1 German Core Values 4.2.3 Mainstream milieus (Culture refers to the shared knowledge, practices, and attitudes of groups of people and can include language, customs, and beliefs about what behavior is appropriate and inappropriate.) Here there are extremely wealthy people, a small but growing middle class, and huge numbers of poor. After assessment, the individual’s cultural profile is pinpointed inside the triangle, showing how close or how far it is to the world’s major cultural groups. - Individualism emphasizes the importance of cultural identity. Abstract and Figures The world economy is becoming increasingly cross-cultural. 2.1 Hofstede and his Concept of Distinguishing National Cultures 5.1.2 Between Luxury and No-Marketing Ethnoconsumerism: A new paradigm to study cultural and cross-cultural consumer behaviour. However, such values must be understood in the local context. “Culture is the lens through which people view products” (Solomon, 1999, p.495). The common grasshopper USA: Pest! The key for success and the challenges to face for companies in any business will be to constantly watch and adapt to the changing cultural values, changing consumption patterns and lifestyles. Definition and Objectives of cross-cultural consumer analysis: To determine whether and how to enter foreign markets, marketers need to conduct some form of cross-cultural consumer analysis. Example; The style of family decision making may vary from country to country. 1.2 The Cultural Iceberg, 2 Value Systems Consumer behaviour Cultural factors have a significant impact on customer behavior. Because of this, the risk of missing the American target is high. Thailand: A snack! 3. The study of LOV stresses the relative importance, or ranking, of these terminal and instrumental values and thus makes clear what distinguishes cultures. Frameworks for assessing multinational strategies. Start studying CB chap 2 - Cross-Cultural Variations in Consumer Behavior. It is about the study of ‘why’ people buy things, about their needs and desires. Culture is learned and is shared amongst members of a certain group. Because a significant degree of culture universally exists throughout the world marketing experts urge the more economical approach of viewing several countries one market. Language is the most important aspect of culture. Cross-cultural Consumer Behavior and Multinational Strategies, Annual Report 2016-2017 of TVS Motor Company. To overcome such a narrow and culturally myopic view, marketers must also go through an acculturation process. Buzzell, citing the economic advantages of standardizing products, packaging, and promotion, cautions that segmentation may still be appropriate where income levels, shopping patterns, language, access to media, and other factors seem to warrant a more narrowly focused approach. A comparison between Germany and the US shows that the value of sense of belonging is very important to Germans, but less important to Americans which underlines the American individualistic character. Cultural Factors, culture, subculture and social class to be examined under three headings (Durmaz and Jablonski, 2012: 56). 1 The Concept of Culture There are different ways of marketing. Income interferes. Emic research focusing on consumption and the meaning of … There is an urgent need for more systematic and conceptual cross-cultural analyses of the psychological, social, and cultural characteristics concerning the consumption habits of foreign consumers. The relationship influences marketing practices. For example, advertising will be far different for American culture and Arabian culture. The field of consumer behavior is young and dynamic. 4.2.2 Hedonistic milieus The so-called sinus-milieus are a very important tool to forcast trends and identify value changes in different societies. Example; Words or concepts may not mean the same in two different countries. The US is a typical example for a weak uncertainty avoidance culture. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Contents Culture Sub Culture Cross Culture Culture and Consumer Behaviour Measurement of Culture 3. Thus, one could assume that numerous larger differences exist between the citizens of different nations. according to consum ers’ cultural orienta ti on and that consumer behavior can be predicted from an understanding of the cultural personal ity of consumers. But a controversy has emerged over best means to approach world markets; one argument maintains that markets should be segmented along national boundaries and another contends that markets are sufficiently alike to standardize marketing initiatives. However the “I” – index of the United States is much higher than of Germany, meaning that the US are more individualistic than Germany. The relevant literature form cross-cultural psychology, anthropology, consumer behavior and international marketing is reviewed in an attempt to describe the impact culture has on salient consumer behavior constructs of perception, information processing, … 4.2 The Sinus–Milieus This understanding helps marketers making proper adaptations in their product, pricing, distribution, and promotion policies. In this framework we structure the cultural components of the person in terms of consumer attributes and processes, and the cultural components of behavior in terms of consumer behavior do-mains. The third group is termed countries in transition, such as England, France, and Italy. What culture is and how it impacts consumer behaviors. Values also determine whether people of a particular culture will be influenced by others in the society. Firms are selling products worldwide for several reasons. 2. From a broader perspective the study of culture is the examination of the character of a total society. Examples are CNN news services, Nescafe. How cross-cultural consumer analysis helps a multinational marketer? This realization is propelling them to expand their horizons and seek consumers scattered all over the world. The market segment will mainly refer to the consumer goods industry of both countries. Cross-cultural psychology is a branch of psychology that looks at how cultural factors influence human behavior. First, with the buildup of “multinational fever” and the general attractiveness of multinational markets, products or services originating in one country are increasingly being sought out by consumers in other parts of the world. Germany however has a slightly smaller power distance index than the US. As we, all know that an individual with a positive attitude is more likely to buy a product and this results in the possibility of liking or disliking a product. Finally, the sixth group is called the new class society and is made up of Russia and its satellite countries. The greater the similarity between nations, the more feasible it is to use relatively similar marketing strategies in each nation. Consumers tend to have an attitude when it comes to a particular product being made in a particular country. Cultural Factors Influencing Consumer Behavior. However this sensitivity can only come from understanding the underlying dimensions of culture. To determine which cell represents the firm’s best strategy, the marketer must conduct cross-cultural consumer analysis to obtain consumer reactions to alternative product and promotional executions: When looking for success in a foreign market, it has been suggested that a company should remember the 3 P’s- Place, People, and Product. The study of consumer behavior is about much more than just people buying things. The first and most important dimension is individualism-collectivism. A major objective of cross-cultural consumer research is to determine how consumers of two or more societies are similar and how they are different. Today, almost all major companies are marketing their products beyond their original homeland borders. Different lifestyle milieus will be compared and visualized. Characteristics of Culture in Consumer Behaviour. Stage Five: Brand has lost national identity and consumers everywhere see it as “borderless” or global; not only can people not identify where it comes from but they never ask this question. In a sense, cross-cultural acculturation is a dual process for marketers. Ernest Dichter conceptualized six different types of countries based on the degree of middle class development. To segment markets effectively, marketers also require an understanding of other cultures. Figure 2: Hofstede’s Dimesions of Culture. Possessions influence the way people feel about themselves and on the other hand, people’s culture, lifestyle and social settings influence their purchasing decisions. The US and Germany can both be regarded as individualistic – as “I” countries. In order to understand why people buy certain products or services, marketers must understand the differences between the consumers of different cultures – „cross-cultural“ differences. Cross-cultural consumer analysis is defined as the effort to determine to what extent the consumers of two or more nations are similar or different. All of these nations sustain a working class of the 19th century variety, but this class is really working at joining the middle class. Nations differ in this dimension, for example, in the way how much value the assign to a high social status, to a renowned profession, or to a high level of education (Hofstede, 2001). Knowledge about the cultural meanings of color, for example, gives marketers some cues to effective product design, advertising and packaging for specific societies. For example, in twenty-three different cultures, “black and grey” are considered “bad” while white, blue, and green are perceived as “good”. Attitudes toward products are rational rather than status oriented, and automobiles are regarded as strictly utilitarian. Understanding cross-cultures help marketers to understand values of other cultures which influence their purchase behavior. According to  Berkman and Gilson, Cross-cultural research is a methodology for comparing cultures on the basis of similarities and differences as well as studying small segments of a total culture. Differences in language and meaning. Because the objective of this paper is to understand the influence of culture on consumer behavior, Schiffmann’s (2003, p.408) definition of culture as “the sum total of learned beliefs, values and customs that serve to direct the consumer behavior of members of a particular society” comes closest to an effective description. 5.1 Trends This increases marketing failures abroad. It changes and develops and is therefore very dynamic. Example; Two countries may differ substantially in the level of use of products or services. 3.3 The Dynamics of Culture, 4 Lifestyle Segmentation Across Cultures To assist in this imposing task, various frameworks have been developed to determine the degree to which marketing and advertising efforts should be either globalized or localized, or mixed or combined. In order to understand why people buy certain products or services, marketers must understand the differences between the consumers of different cultures – „cross-cultural“ differences. (Sigma Two Group). It includes factors such as knowledge, language, religion, food customs, art, music, technology, work patterns, products and other facts that give a society its distinct flavor (Schiffmann, 2003). Psychologist Ralph B. Hupka and his team conducted an experiment to investigate the phenomenon of verbal synesthesia in response to color stimulation in Germany, Mexico, Poland, Russia, and the United States. Stage Two: Local consumers view a brand made elsewhere as “foreign,” made in a particular country but locally available. Figure 3: Distribution of LOV values in different countries (% rating as most important value). Recently, cross-cultural methodology has been applied to marketing research, closely aligned with developments in multinational marketing. Thus, Example; The benefits sought from a service may differ from country to country. How culture is learned and expressed in language, symbols, and rituals. Conflicts are regarded as natural part of productivity and career change is important. Career stability is more important, conflicts are seen as a negative impact, clear procedures are expected and uncertainty is treated as a threat. The field of consumer behavior is young and dynamic. Differences in consumption pattern. a) Culture Culture is the essential character of a society that distinguishes it from other cultural groups. Culture is not stable in itself. Some of the important cultural factors are: If the society values collective activity decisions will be taken in a group.It gives rise to following questions which affect consumer behaviour: Basic Research Issues in Cross-Cultural Analysis: The following table identifies basic issues that multinational marketers must consider when planning cross-cultural consumer research. With the rise of expressive technologies, cultural consumers have harnessed the Internet to fuel their own creative efforts. The question is generally not whether to market a brand in other countries but rather how to do it (Schiffmann, 2003). However Germany has a slightly higher masculinity index. The Hofstede model is used to explain variance. "Cross-cultural consumption" occurs when a product or service is produced in one culture but consumed in some other culture. The last chapter will focus on marketing opportunities such as ‘hot’ market segments and trends as well as on marketing mistakes as a failure of understanding differences. Marketers interested in global expansion are especially interested in understanding cross-cultural differences in … 4.1 Models of Market Segmentation To attain a deeper understanding of culture, it is important to understand the underlying set of belief and values that form peoples’ behavior and thinking. The US and Germany can both be regarded as small power distance cultures. Knowing this aspect of a culture helps marketers identifying reference groups that will have bearing on consumer behavior. It is also transferred from one generation to the next (Ting-Toomey, 1999). Masculine cultures emphasize achievements, economic growth, business performance and life in order to work. Vice versa, many Americans miss the target in operating effectively in foreign countries (Ting-Toomey, 1999). A consumer’s level of exposure towards foreign goods or lifestyles may influence his buying decisions and preferences. - Masculinity pertains to societies in which social gender roles are clearly distinct (Hofstede, 2001). On the other hand, if 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. They refer to the accumulated feelings and priorities that individuals have about things and possessions. Cross-cultural study is an extremely important activity for a multinational marketer. Intro Cross-Cultural Consumer behaviour People are different in psychological, social and cultural orientations people fall in segments understanding these segments is very crucial for serving consumers. - It only takes five minutes Open confrontation and active exchange of different opinions characterize individually oriented countries. The strategies are: Acculturation is a needed marketing viewpoint. Google Scholar Terminal Values apply to many different cultures whereas the instrumental values are the actions needed to achieve these terminal values (Solomon, 2002). How culture sets standards for what atisfies consumers’ needs. Ting-Toomey (1999) explaines culture as an iceberg: Traditions, beliefs and values form the deeper layers of the iceberg which are hidden for the viewer. 5. Also Germans seem to value fun and enjoyment in life more than Americans. This means that all parts must fit together in some logical fashion. England produces Rolls Royce and Italy Ferrari and Maserati. - Uncertainty avoidance reflects the avoidance of situations where the outcome is uncertain. On the other hand, the ways in which people live their consumption life can already vary greatly within one country only. So marketers should conduct extensive cross-cultural research and set multinational strategies accordingly.