1. CHAPTER
THIRTEEN
Cross-Cultural
Consumer Behavior:
An International
Perspective
2. Learning Objectives
1. To Understand the Importance of Formulating an
Appropriate Multinational or Global Marketing
Strategy.
2. To Understand How to Study the Differences
Among Cultures While Developing Marketing
Strategies.
3. To Understand How Consumer-Related Factors
Impact a Firm’s Decision to Select a Global, Local, or
Mixed Marketing Strategy.
4. To Understand How Lifestyle and Psychographic
Copyright Segmentation Can PrenticeUsed.
2010 Pearson Education, Inc. Publishing as Be Hall Chapter Thirteen Slide 2
3. Under What Circumstances Would This English-Language Ad
Attract Affluent Consumers from Largely
Non-English Speaking Countries?
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 3
4. If They Frequently Visit the United States
and Regularly Read American Upscale Magazines
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 4
5. The Imperative to Be Multinational
• Global Trade
Agreements
– EU
– NAFTA
• Winning Emerging
Markets
• Acquiring Exposure to
Other Cultures
• Country-of-origin Effects
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 5
6. The Best Global Brands - Table 13.1
1. Coca-Cola
2. IBM
3. Microsoft
4. GE
5. Nokia
6. Toyota
7. Intel
8. McDonald’s
9. Disney
10.Google
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 6
7. Discussion Questions
• What challenges may Toyota have faced to
get their status as one of the top brands?
• What might they have done right in their
marketing strategy to achieve this status?
Consider the 4Ps.
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 7
8. Country of Origin Effects:
Positive
• Many consumers may take into consideration
the country of origin of a product.
• Country-of-origin commonly:
– France = wine, fashion, perfume
– Italy = pasta, designer clothing, furniture, shoes,
and sports cars
– Japan = cameras and consumer electronics
– Germany = cars, tools, and machinery
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 8
9. Country of Origin Effects:
Negative
• Some consumers have animosity toward a country
– People’s Republic of China has some animosity to Japan
– Jewish consumers avoid German products
– New Zealand and Australian consumers boycott French
products
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 9
10. Why Do Most Global
Airlines Stress Pampering
Business Travelers in Their Ads?
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 10
11. Upscale International Business
Travelers Share Much in Common.
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 11
12. Other Country-of-Origin Effects
• Mexican study uncovered:
– Country-of-design (COD)
– Country-of-assembly (COA)
– Country-of-parts (COP)
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 12
13. Conceptual Model of COD and COM
Figure 13.2
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 13
14. The effort to
determine to what
Cross-Cultural
extent the
Consumer
consumers of two
Analysis
or more nations are
similar or different.
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 14
15. Cross-Cultural Consumer Analysis
Issues
• Similarities and • The greater the similarity
differences among between nations, the
people more feasible to use
• The growing global relatively similar
middle class marketing strategies
• The global teen market • Marketers often speak to
the same “types” of
• Acculturation
consumers globally
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 15
16. Discussion Questions
• Are people becoming more similar?
• Why or why not?
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 16
17. Comparisons of Chinese and American
Cultural Traits - Table 13.2
• Chinese Cultural Traits • American Cultural Traits
• Centered on Confucian • Individual centered
doctrine • Emphasis on self-
• Submissive to authority reliance
• Ancestor worship • Primary faith in
• Values a person’s duty rationalism
to family and state • Values individual
personality
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 17
18. Cross-Cultural Consumer Analysis
Issues
• Similarities and • Growing in Asia, South
differences among America, and Eastern
people Europe
• The growing global • Marketers should focus
middle class on these markets
• The global teen market
• Acculturation
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 18
19. Cross-Cultural Consumer Analysis
Issues
• Similarities and • There has been growth in an
differences among affluent global teenage and
people young adult market.
• They appear to have similar
• The growing global
interests, desires, and
middle class consumption behavior no
• The global teen market matter where they live.
• Acculturation
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 19
20. Cross-Cultural Consumer Analysis
Issues
• Similarities and • Marketers must learn
differences among everything that is
people relevant about the
• The growing global usage of their product
middle class and product categories
• The global teen market in foreign countries
• Acculturation
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 20
21. Research Issues in Cross-Cultural Analysis
Table 13.8
FACTORS EXAMPLES
Differences in language and meaning Words or concepts may not mean the
same in two different countries.
Differences in market segmentation The income, social class, age, and sex of
opportunities target customers may differ dramatically
in two different countries.
Differences in consumption patterns Two countries may differ substantially in
the level of consumption or use of
products or services.
Differences in the perceived benefits of Two nations may use or consume the
products and services same product in very different ways.
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 21
22. Table 13.8 (continued)
FACTORS EXAMPLES
Differences in the criteria for evaluating The benefits sought from a service may
products and services differ from country to country.
Differences in economic and social The “style” of family decision making
conditions and family structure may vary significantly from country to
country.
Differences in marketing research and The types and quality of retail outlets
conditions and direct-mail lists may vary greatly
among countries.
Differences in marketing research The availability of professional consumer
possibilities researchers may vary considerably from
country to country.
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 22
23. Alternative Multinational Strategies:
Global Versus Local
• Favoring a World Brand
• Are Global Brands Different?
• Multinational Reactions to Brand Extensions
• Adaptive Global Marketing
• Frameworks for Assessing Multinational
Strategies
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 23
24. Products that are
manufactured,
packaged, and
World
positioned the same
Brands
way regardless of the
country in which they
are sold.
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 24
25. Why Does One of the World’s Most Highly Regarded
Wristwatch Brands Use a Single Global Advertising
Strategy (Only Varying the Language)?
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 25
26. They Speak to Them in Their Own Language to
Maximize their “Comfort Zone.”
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 26
27. Cross-Border Diffusion of Popular Culture
Figure 13.6
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 27
28. Are Global Brands Different?
• According to a survey – yes
• Global brands have:
– Quality signal
– Global myth
– Social responsibility
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 28
29. Multinational Reactions to
Brand Extensions
• A global brand does not always have success
with brand extensions
• Example Coke brand extension – Coke
popcorn
– Eastern culture saw fit and accepted the brand
extension
– Western culture did not see fit
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 29
30. Adaptive Global Marketing
• Adaptation of advertising message to specific
values of particular cultures
• McDonald’s uses localization
– Example Ronald McDonald is Donald McDonald in
Japan
– Japanese menu includes corn soup and green tea
milkshakes
• Often best to combine global and local
marketing strategies
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 30
31. Discussion Questions
• If your university is considering a satellite
business program in Korea:
– How would they need to adapt the program?
– What would prompt these changes?
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 31
32. Framework for Assessing
Multinational Strategies
• Global
• Local
• Mixed
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 32
33. A Framework for Alternative Global
Marketing Strategies - Table 13.10
COMMUNICATON
STRATEGY
PRODUCT STANDARDIZED LOCALIZED
STRATEGY COMMUNICATIONS COMMUNICATIONS
STANDARDIZED Global strategy: Mixed Strategy:
PRODUCT Uniform Product/ Uniform Uniform Product/
Message Customized Message
LOCALIZED Mixed strategy: Local Strategy:
PRODUCT Customized Product/ Customized Product/
Uniform Message Customized Message
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 33
34. Cross-Cultural
Psychographic Segmentation
• The only ultimate truth possible is that
humans are both deeply the same and
obviously different.
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 34
35. Six Global Consumer Segments
Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall Chapter Thirteen Slide 35
Here is an outline of the topics for Chapter Thirteen.
Most marketers agree that it is important to be a global marketer in order to survive in the market. But they also realize there are serious challenges in global marketing. Most governments are working to help the movement of goods and services by creating changes in their government. Consider the European Union’s effort to form a single market and the establishment of NAFTA, which aids the U.S., Canada, and Mexico in trade relations. These are two strong examples of the government’s role in expanding business. This web link takes you to an English-language homepage of the European Union’s website. In addition to changes in these large countries, marketers must realize that about 85% of the world’s population live in what are classified as emerging markets and include Brazil, Russia, India, and China to name a few. These countries, like the rest of the world, are being exposed to cultures from other countries and have increased interest in global products.
According to BusinessWeek, Coca-Cola is the most valuable brand in the world with a brand value of almost $67 billion. This web link goes to the Coca-Cola homepage. As with many global brands, the first question you see when you enter the web site is “Which country are you from?”
Consider the competition, the customer, and the country of origin. For the 4Ps, what might be in their price, distribution, product line, and promotion?
Consumers will differ in their perceived image of a product based on the country of origin (COO) . COO often makes it easier for a consumer to make a decision. For example, it might be easier to pick a wine if you just choose a French wine because you know France is known for its wine. Research has shown a tie between NFC (need for cognition) and country of origin assessment.
There are some groups of consumers which can be labeled high-animosity consumers when considering country of origin. The Chinese are reacting to their occupation in WWII by Japan, the Jewish consumers to the Holocaust, and some New Zealand and Australian consumers to France’s nuclear tests in the South Pacific.
A Mexican study decomposed COO into these three entities. Origin is now further broken into where the product was designed, assembled, and/or where the raw materials are produced. The results of the study showed differences between Mexicans and Americans and differences in age in their country-of-origin effects. On the next slide, you can see a model of COD and COM.
In this model, we can see the impact of COD and COM on the perception of branded products. You can see the impact of COD and COM on perceived product quality.
Cross-cultural consumer analysis , the similarity and differences between consumers in several nations, is important when deciding whether or not to enter a foreign market. The analysis carefully considers the psychological, social, and cultural similarities and differences among people.
The more similar two nations, the more likely the marketer can use similar marketing strategies. As a basis of similarity, marketers often look to see if a country is more collective in its culture vs. individualistic. This is really the difference between a “we” culture and an “I” culture. In a few slides, you can see detailed differences between a Chinese and an American consumer.
You no doubt have an impression of people your age in different countries. Does it seem that over time we are becoming more similar?
We can see some of the traits that are examined are values, faith, and attitude to authority.
The middle class will grow globally with the largest growth coming from China and India. This creates significant opportunity to marketers who provide products and services for this middle class. In some countries, the middle class is very large. South Korea is considered to have more than 90 percent of its population as middle class.
The interesting thing about the teen market is the similarities teens share even when they live in vastly different countries. Marketers realize that teens in most countries value their cell phone and online sources.
We have learned in previous chapters that when someone moves to a new country, they go through an acculturation process where they learn the customs, rituals, and attitudes. Marketers must put themselves through an acculturation process before trying to market to a new country. If they don’t truly understand the values, beliefs, and customs of the society, they cannot really market products effectively.
Cross-cultural analysis is very difficult for many reasons. This chart gives some examples of the basic issues that multinational marketers must consider when planning cross-cultural research.
Some marketers will argue that since people are becoming more alike in so many countries, that one marketing strategy, with some small adjustments in language, are cost effective and a better idea. Other marketers believe there are national borders and that marketing strategies must stay local. This slide lists several issues which will be explored in more detail on the following slides.
World brands are often created with very high-end products targeted to an affluent market. But beyond this, other marketers, including P&G, have moved to a world brand for a small percent of their product portfolio.
Here is a model of cross-border diffusion of popular culture. Some interesting parts of this model include promotion and distribution and the central role of the early adopter.
Research tells us that global brands are indeed viewed differently than local brands. Because a brand is global, consumers worldwide must believe in it so it must be of good quality. The global myth characteristic is related to how consumers feel about themselves. The global brands make them feel like a citizen of the world, whereas a local brand gives them less power and identity. Finally, global brands tend to show more social responsibility than local brands. In part because of their sales revenue and their investment in many countries, they are viewed as more socially responsible.
At first, one would think the power of a global brand would enable it to be more successful with brand extensions. This does not turn out to be true because people are not holistic in their thinking – they do not take the overall brand name and apply it to any product group – it remains specific for the product category in which it built its reputation.
Some marketers do not want a common message, positioning, and product offering throughout the world. Some, including McDonald’s, Levi’s, and Reebok, prefer to use multi-local strategies. They create different brand images for their products for different countries. The best approach is often to combine an overall global strategy with local executions which match the cultural differences of the target countries. This gives the power of a world brand combined with local marketing strategies to adapt to the different cultures. This web link will take you to a Japanese McDonald's menu which Google will translate for you. Notice how many of the products are available in other countries yet a few are unique to Japanese tastes.
Think about the parts of the educational program and how they must be altered.
Many frameworks have been created to help marketers decide whether they should focus on global, local, or mixed strategies. The framework on the following slide will guide you through some of this decision making.
The two main areas a marketer must consider in localized marketing strategies are their product and communications strategy. Can they sell the same product in each country or do local differences require a localized product? Food products often need to be localized as countries differ in their response to such flavors as spiciness, saltiness, sweetness, and use of ingredients. Product standardization works well on technical products. The localization of the message is a decision that is distinct from that of the product. It will depend heavily on language issues and differences in involvement level of the product.
This is the best way of looking at global marketing, by examining psychographic groups. For example, the percent of the U.S. female population that works outside the home is the same as the percent of the Japanese female population. But when we look at the psychographics of these groups, we find that they have very different consumer behavior and attitudes to certain products.
After extensive research of 35,000 customers in 35 countries, researchers created these six global value groups or segments. The strivers are ambitious and materialistic, the devouts responsible and respectful, the altruists unselfish in their concern for others, the intimates focus on social relationships, the fun seekers are young in age and outlook and value a good time, and the creatives seek knowledge and have interests in books and new media.