Global process of convergence or divergence in consumer behaviour have seen much light in the debate of whether multi-national companies should maintain a standardized homogenous outlook for their brands, products and services or is it more appealing to consumers across the globe to be offered something that is more catered to their roots, culture and way of life.
In the analogue and seemingly arithmetic world of corporatism, the question to be is asked is: What is culture, and more importantly, does culture even matter?
Clifford Geertz, considered to be one of the champions of symbolic anthropology, described culture as the very fabric of experiences and meaning by ways of which people communicate, perpetuate, and develop their knowledge and attitudes toward life. According to this celebrated scholar, culture works as a lens that determines how individuals see the world as well as being blue prints that outline people’s activities, stances and behaviours.
This view is supported by the anthropologist and director of the Institute of Contemporary Culture, Grant McCracken, who views culture as a vessel that constitutes the world by supplying it with connotation through enriching categories and edifying traditions. Culture is viewed by these academics as a means of identity, aesthetic, meaning and pride that instils a sense of belonging amongst a group of people. A Dutch social psychologist by the name of Geert Hofstede further divides the phenomenon of culture into values, norms, customs and conventions. The core of culture is formed by values which facilitate to assign positive and negative standards to human perception of the world and the way people determine perspectives and understand their surroundings.
Research conducted by Michael Solomon in 2006 suggests that a consumer’s culture can dictate or guide the priorities they attach to different activities and products, and can in turn play a significant part in determining the success and failure of products and services in a global context.
For any company that has a customer focused research and development model, consumer preference of global or local purchasing can be understood by looking at values at various different theoretical levels. According to research conducted by Shalom Schwartz, ‘Values are cognitive beliefs about desirable goals and modes of conduct to promote these goals, which vary in importance, and serve as standards to guide attitudes and behaviour’ such as power, stimulation, achievement, tradition etc, which are a part of the general set of values.
Inglehart and Baker’s concept discusses national or cultural values that are shared beliefs amongst people living in the same society, country or community and shape consumption practises in terms of acceptance and conventionalism amongst a group of people. These values can determine whether people’s purchasing conforms to traditional values or to a more individualistic level, where they choose to purchase goods that enable them to express themselves as they wish to be perceived. Lastly, research conducted by Gerard Tellis in 2009 illustrates domain specific values such as innovativeness, nostalgia and ethnocentrism that can also establish purchasing decisions but on a more personal level, such as bridging gaps between more contemporary products as opposed to less modern but more familiar ones.
Globalization versus standardization of businesses has been an ongoing debate for several decades. Academic consultants such as Theodore Levitt (Harvard Business Review) and George Yip (Journal of International Marketing) have argued that consumers are more partial towards high quality goods at low prices, a strategy that can be achieved through standardization, in the course of which firms can achieve economies of scale and high profit margins.
Brands such as Red Bull, The Body Shop, and Hello Kitty, are examples of successful standardized global businesses in terms of providing the same retail experience, products and advertising throughout the world.
Due to an increase in technology and media, and via the internet, the world is seen to have become a global village, therefore the lack of borders and the increase in convergence of technology is believed to pave the way for homogenous wants, tastes and lifestyles amongst consumers, such as the popular teen culture of ‘Bieber Fever’ (Justin Bieber’s global following amongst teens) being broadcasted across the world through the same channels. It is believed that in many situations standardization can actually increase preference of a product because to put it in layman’s terms, a certain thing is ‘in’ fashion and the global hype created through social media and other similar forums leads to a more correlated demand across the globe.
However, research conducted by Benedict Steenkamp provides contradictory statements accentuating the fact that customers are embracing a more heterogeneous consumer culture to add meaning to their lives and give direction to their experiences through the consumption of more globally customized goods. Robert Holton, a professor at the University of Florida, contributes through extensive research that people associate bespoke products to modernity, consumerism and progress and that it is widely recognized that the interpenetration of local cultures and the cultural forces associated with the globalization of the marketplace heavily influence contemporary consumer culture.
A large body of work by Grant McCracken discusses the ‘Why?’ factor in consumer purchases. McCracken’s work significantly revolves around the consumer psychology and indicates that often the purchase of consumer goods goes far beyond its utilitarian purpose and into the meaning of what the goods actually signify. People purchase the brand essence or what the product or service represents more than they purchase its use. A product or a service taps into an intrinsic place within the consumer and a purchase then becomes an act of much more sentimental importance than a mere utilitarian purchase, or as Russell Belk, who is considered to be an expert in the field of consumer behaviour portrays it, the product becomes a part of the consumer’s extended self. The research relates to the practice of extracting meaning from culture and applying that to consumer goods, and the successful transmission of that meaning onto the consumer to create that desire to make the purchase.
The process of global divergence due to cultural consumption practises is further elaborated by the work of Greet Hofstede’s dimensions of national culture. According to this research, natives from different countries develop purchasing behaviours based on the national cultures of their countries; especially based on the individualism versus collectivism concept. The Individualism culture revolves around the individual and their responsibility for themselves and only their immediate family. This type of culture is popular in the U.S. The collectivists are found more in countries like India, Japan, and China amongst others, where culture and identity revolves around a group or society one belongs to. The variation in both cultures lead to very different consumption practises as for example, a collectivist family would typically purchase a reliable seven seat family car to accommodate everyone, where as an individualist might purchase a two seat sports car to fulfil their own needs.
However, even though Hofstede’s theory provides a significant explanation for global divergence processes, it assumes that everyone in a country follows the same system.
Professor Eric Arnold of The University of Bath proposes a more fragmented view of national culture in the shape of the consumer culture theory which illustrates cultural meanings as being uneven and numerous and hence views culture as an amalgam of different groups and shared meanings, rather than a homogenous construct. The name of a country with a prominent culture such as the U.S. or Korea might conjure typical images of their cultures such as individualistic for the U.S., however, as a unit, a country can be delimited and different not only culturally, but also politically, and on socio economic levels. One country can and does harbour many different cultures at various levels of society which leads to various styles and customs of consumption even within a single culture.
Cultural differences can be further divided by gender, demographics, or generation level which have a significant impact on purchasing practises, and make the standardization of products considerably harder to maintain.
The use of the standardization technique too has brought international brands such as Coca-Cola, McDonalds and Cadburys amongst others, undisputed success and credibility over the years.
However, despite the economies of scale and one all strategy, generic brands such as Coke are now seemingly changing their standardized strategy to a more global one, giving their managers and bottlers more leeway for tailoring strategic changes according to the market they are targeting, including introducing new flavours such as Orange Coke in Russia and Raspberry Coke and Vitamin Coke in the U.S.
Standardized brands such as Starbucks took their ‘Italian coffee experience’ global and have identical franchises and products all over the world; however, they have an international customization of drinks in some countries such as such their Banana Java Chip, Mango, and Adzuki coffees/ beverages in the Philippines. Also, the Blackberry Green Tea is currently available in the Philippines and Australia. There is also a Coconut Mocha Frappuccino available only in Hawaii.
Similarly, McDonalds, one of the largest global fast food chains in the world, remains fairly standardized in its branding and outlook, however, adapts local advertising and includes tailored options on its menu in different countries, such as the McAbrabia sandwich in South-East Asian countries, and their pricing strategies differ globally too.
With globalization taking centre stage in the world, ethical consumption practises are also moving towards a more divergent approach, as ethical behaviour defers within different places in the world and because ethics are a part of culture, to study ethical choices without explicitly considering their cultural context is not realistic. Brands and companies with ethical representation have to consider the ethical approaches they use, as well as the ethical beliefs of their consumers, in order to succeed in the market place. For example, child labour is viewed as unethical in western countries, and therefore, any companies that use child labour, may be considered unethical for adopting these practises. However, in third world countries such as Africa, Pakistan, and Bangladesh amongst others, due to high illiteracy and low income rates, child labour is a normal state of existence while the unethical aspect lies at the hinges of society under the veil of feigned unawareness. Another example of ethical global differences is the ban on smoking adverts in European countries whereas tobacco goods are still heavily advertised in other countries. Bi-lingual advertising practices can also be a milestone in adopting divergent or convergent business practices. Companies such as DANONE and Unilever adopt a diversified approach and advertise their products in the local language of the area they are selling in.
Examples of more divergent global brands are MNC giants Unilever, Nestle and Procter & Gamble. Unilever’s Indian subsidiaries Hindustan Unilever Limited were pioneers inidentifying local needs for their rural target markets to consume products in smaller quantities instead of purchasing products in larger quantities or bulk. The introduction of shampoo sachets revolutionized a whole new niche in the market and the strategy was then followed by many other companies in producing sachets of washing powder, tea bags and other such day to day utilities in smaller packaging. Until recently the impact of culture was not well implicated in businesses. Concentrating on centralised marketing units and business strategies and excluding cultural influences on consumption resulted in declining efficiency of businesses. Several large multinational companies have seen their turnovers decline because centralized control lacked local sensitivity, for example; in the mid-90s Ford centralized their global management which took the sole focus off the needs of their European segments and sales suffered greatly.
More recent research indicates the emergence of the concept of glocalization which illuminates an equal or no particular preference for local and global products amongst consumers. It is understood that because of the far outreach of the internet and television, people may consume some of the same entertainment or music and even the same brands; however, they may still have varying loyalties, interests and values. Similarity in some aspects of lifestyle doesn’t necessarily make the world a homogenized unit. Someone in a South Asian country wears the same Nike shoes as an American; however, they will take those shoes off while entering a religious structure because they have different values and traditions. Even if people do purchase the same technology or play the same sport or watch similar programs across the world, the context and extent in which they do so are different, and understanding these differences or similarities, understanding the target market and its needs, is a key element in any industry today. Understanding the ‘Whys’ of the consumer world has become a vital strategy in order generate brand loyalty and thus favourable brand positioning. Even though the world seems to be teetering on the verge of becoming a very small global village, in an era where brands sell appeal and consumers purchase emotions, it has become crucial to understand the mental and sentimental processes of target markets.