2-1 © 2007 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

2-2 PART II: EXTERNAL INFLUENCES

2-3 CHAPTER 2 CROSS- CULTURAL VARIATIONS IN CONSUMER BEHAVIOR

2-4 Consumer Behavior In The News… SUV’s in China?  Yes!  Expect SUV Segment to be 20% of Market in 2009 (up from 8% in 2004).  Barriers:  Drivers:  Will Trend Sustain in Face of Rising Fuel Costs? Source: J. B. White, “China’s SUV Surge,” The Wall Street Journal, June 10, 2004, p. B1, B3

2-5 Consumer Behavior In The News… SUV’s in China?  Yes!  Expect SUV Segment to be 20% of Market in 2009 (up from 8% in 2004).  Barriers: Traffic Jams, Gov’t Push to Conserve Fuel, Cost of Fuel  Drivers: Bold Image, Greater Capacity, Safety  Will Trend Sustain in Face of Rising Fuel Costs? Source: J. B. White, “China’s SUV Surge,” The Wall Street Journal, June 10, 2004, p. B1, B3

2-6 Marketing Across Cultural Boundaries is a Difficult and Challenging Task

2-7 The Concept of Culture Culture Culture is the complex whole that includes knowledge, belief, art, law, morals, customs, and any other capabilities and habits acquired by humans as members of society.

2-8 The Concept of Culture Although pizza is eaten most everywhere, what is on the pizza can be quite different! Pepperoni Squid Tuna & Corn Black Bean Sauce BBQ Chicken Eggs

2-9 The Concept of Culture Cultural values sanctions consumption patterns Cultural values give rise to norms and associated sanctions, which in turn influence consumption patterns. Cultures are not static. They typically evolve and change slowly over time.

2-10  Other-Oriented Values  Environment-Oriented Values  Self-Oriented Values Variations in Cultural Values The numerous values that differ across cultures and affect consumption include:

2-11 Variations in Cultural Values Reflect a society’s view of the appropriate relationships between individuals and groups within that society. Other-Oriented Values

2-12 Variations in Cultural Values Prescribe a society’s relationship to its economic and technical as well as its physical environment. Environment-Oriented Values

2-13 Variations in Cultural Values Reflect the objectives and approaches to life that the individual members of society find desirable. Self-Oriented Values

2-14 Variations in Cultural Values Other-Oriented Values  Individual/Collective  Youth/Age  Extended/Limited Family  Masculine/Feminine  Competitive/Cooperative  Diversity/Uniformity

2-15 Variations in Cultural Values Individual/Collective Are individual activity and initiative valued more highly than collective activity and conformity? Other-Oriented Values Asian cultures more collective U.S. culture more individualistic pp. 46 questions

2-16 Variations in Cultural Values Youth/Age Other-Oriented Values Is family life organized to meet the needs of the children or the adults? Are younger or older people viewed as leaders and role models?

2-17 Variations in Cultural Values Extended/Limited Family Other-Oriented Values To what extent does one have a life-long obligation to numerous family members? Extended family critical in South/ Central America

2-18 Variations in Cultural Values Masculine/Feminine To what extend does social power automatically go to males? Other-Oriented Values

2-19 Variations in Cultural Values Competitive/Cooperative Other-Oriented Values Does one obtain success by excelling over others or by cooperating with them?

2-20 Variations in Cultural Values Diversity/Uniformity Does the culture embrace variation in religious belief, ethnic background, political views, and other important behaviors and attitudes? Other-Oriented Values

2-21 Variations in Cultural Values Environment-Oriented Values  Cleanliness  Performance/Status  Tradition/Change  Risk taking/Security  Problem solving/Fatalistic  Nature

2-22 Variations in Cultural Values Cleanliness Environment-Oriented Values To what extent is cleanliness pursued beyond the minimum needed for health? U.S. very high on personal hygiene – some think to an extreme!

2-23 Variations in Cultural Values Performance/Status Environment-Oriented Values Closely related to the concept of power distance, which refers to the degree to which people accept inequality in power, authority, status, and wealth as natural or inherent in society. Is the culture’s reward system based on performance or on inherited factors such as family or class?

2-24 Variations in Cultural Values Tradition/Change Is tradition valued simply for the sake of tradition? Is change or “progress” an acceptable reason for altering established patterns? Environment-Oriented Values

2-25 Variations in Cultural Values Tradition/Change (Cont.) A focus on technology as an indicator of change illustrates some dramatic differences across cultures that show the following: Environment-Oriented Values The above represent Internet users and cell phones as a percent of total population

2-26 Variations in Cultural Values Risk taking/Security Are those who risk their established positions to overcome obstacles or achieve high goals admired more than those who do not? A society that does not admire risk taking is unlikely to develop enough entrepreneurs to achieve economic change and growth. Environment-Oriented Values

2-27 Variations in Cultural Values Problem solving/Fatalistic Are people encouraged to overcome all problems, or do they take a “what will be, well be” attitude? Is there an optimistic, “we can do it” orientation? Mexico and Middle-East Countries tend to fall toward the fatalistic end of the continuum. Environment-Oriented Values

2-28 Variations in Cultural Values Nature Is nature regarded as something to be admired or overcome? Environment-Oriented Values

2-29 Variations in Cultural Values Self-Oriented Values  Active/Passive  Sensual gratification/Abstinence  Material/Nonmaterial  Hard work/Leisure  Postponed gratification/Immediate gratification  Religious/Secular

2-30 Variations in Cultural Values Active/Passive Is a physically active approach to life valued more highly than a less active orientation? Self-Oriented Values

2-31 Variations in Cultural Values Sensual gratification/Abstinence To what extent is it acceptable to enjoy sensual pleasures such as food, drink, and sex? Cultures differ in their acceptance of sensual gratification. Self-Oriented Values

2-32 Applications in Consumer Behavior Ad for Calvin Klein underwear: OK in U.S. and France. Not appropriate in cultures that place a high value on abstinence.

2-33 Variations in Cultural Values Material/Nonmaterial How much importance is attached to the acquisition of material wealth? Self-Oriented Values Two types of materialism: 1.Instrumental materialism 1.Instrumental materialism – is the acquisition of things to enable one to do something. 2.Terminal materialism 2.Terminal materialism – is the acquisition of items for the sake of owning the item itself.

2-34 Variations in Cultural Values Hard work/Leisure Is a person who works harder than economically necessary admired more than one who does not? Self-Oriented Values

2-35 Variations in Cultural Values Postponed gratification/Immediate gratification Are people encouraged to “save for a rainy day” or to “live for today”? Self-Oriented Values

2-36 Variations in Cultural Values Religious/Secular To what extent are behaviors and attitudes based on the rules specified by a religious doctrine? Self-Oriented Values

2-37 Cultural Variations in Nonverbal Communications

2-38 Cultural Variations in Nonverbal Communications Time monochronic polychronicTime perspective—the culture’s overall orientation toward time (monochronic vs. polychronic) Interpretations assigned to specific uses of time The meaning of time varies between cultures in two major ways:

2-39 Cultural Variations in Nonverbal Communications Overall use and meanings assigned to space vary widely among different cultures Space - -how office space is allocated - -Personal space

2-40 Cultural Variations in Nonverbal Communications Symbols Colors, animals, shapes, numbers, and music have varying meanings across cultures. Failure to recognize the meaning assigned to a symbol can cause serious problems!

2-41 Cultural Variations in Nonverbal Communications

2-42 Cultural Variations in Nonverbal Communications Relationships How quickly and easily do cultures form relationships and make friends? Americans tend to form relationships and friends quickly and easily. Chinese relationships are much more complex. Under the concept of guanxi, an individual can draw upon personal connections/relationships to secure resources or advantages when doing business as well as in the course of social life.

2-43 Cultural Variations in Nonverbal Communications Agreements How does a culture ensure business obligations are honored? How are disagreements resolved? Some cultures rely on a legal system; others rely on relationships, friendships, kinship, local moral principles, or informal customs to guide business conduct.

2-44 Cultural Variations in Nonverbal Communications Things The cultural meaning of things leads to purchase patterns that one would not otherwise predict. The differing meanings that cultures attach to things, including products, make gift-giving a particularly difficult task. For example, what type of gift is appropriate and when does receipt of a gift “require” a gift in return?

2-45 Cultural Variations in Nonverbal Communications Etiquette The generally accepted ways of behaving in social situations. Behaviors considered rude or obnoxious in one culture may be quite acceptable in another! Normal voice tone, pitch, and speed of speech differ between cultures and languages, as do the use of gestures.

2-46 Cultural Variations in Nonverbal Communications Etiquette Meishi is an important aspect of Japanese business etiquette…”a man without a Meishi has no identity in Japan.” What is Meishi? It is the exchange of business cards!

2-47 Global Cultures A Global Teenage Culture? Mass media and the Internet have had an impact of uniformity among teens around the world. They tend to watch many of the same shows, see the same movies and videos, listen to the same music, and they tend to dress alike.

2-48 Global Demographics Demographics Demographics describe a population in terms of its size, structure, and distribution. Demographics are both a result and a cause of cultural values. For example, densely populated societies, such as China, are likely to have more of a collective orientation than an individualistic one. Disposable income is one aspect of demographics--the rapid growth in personal income in parts of China has led to an overall market explosion!

2-49 Global Demographics A critical aspect of demographics for marketers is income--specifically the distribution of income. One country with a relatively low average income can have a sizable middle-income segment, while another country with the same average income may have most of the wealth in the hands of a few individuals.

2-50 Global Demographics CountryGDP (per capita) % of total income (to top 10%) Brazil$ 7,60048% China 5,00030 United Kingdom 27,70028 United States 37,80031

2-51 Global Demographics Purchasing Power Parity (PPP) PPP Marketers increasingly use Purchasing Power Parity (PPP) rather than average or median income to evaluate markets. PPP is based on the cost of a standard market basket of products bought in each country. CountryPer Capita IncomePer Capita PPP Brazil$ 7,600$ 7,480 China 1,100 4,990 United Kingdom 28,350 27,650 United States 37,610 37,500 The following shows the same countries in terms of PPP:

2-52 Cross-Cultural Marketing Strategy Considerations in Approaching a Foreign Market 1.Homogeneous versus Heterogeneous with Respect to Culture? 2.What Needs Can the Product Fill in this Culture? 3.Can Enough People Afford the Product? 4.What Values are Relevant to the Purchase and Use of the Product? 5.What are the Distribution, Political and Legal Structures for the Product? 6.In What Ways Can We Communicate About the Product? 7.What are the Ethical Implications of Marketing This Product in This Country?

2-53 Applications in Consumer Behavior Adaptation is Often Required in Cross- Cultural Marketing. Here, McDonald’s uses a Popular Chinese Sports Celebrity. GOH CHAI HIN/AFP/Getty Images