ANALYSE CONSUMER BEHAVIOUR FOR SPECIFIC INTERNATIONAL MARKETS

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ANALYSE CONSUMER BEHAVIOUR FOR
SPECIFIC INTERNATIONAL MARKETS





STUDENT REFERENCE AND WORKBOOK




Analyse consumer behaviou
r for specific international markets

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TABLE OF CONTENTS


UNIT OVERVIEW

................................
................................
................................
..

1

CHAPTER 1. INTRODUCTION
-
OVERVIEW OF CONSUMER / BUYER
BEHAVIOUR

................................
................................
................................
..........

2

GOALS

................................
................................
................................
...............

2

1.1 The marketing concept

................................
................................
.................

2

1.1 Exercises

................................
................................
................................
...

2

1.2 Consumer behaviour

................................
................................
....................

3

1.2 Exercises

................................
................................
................................
...

3

1.3 The difference between consumer behaviour and behaviour

.......................

3

1.3 Exercises

................................
................................
................................
...

3

1.4 Categories of buyer and consumer behaviour

................................
..............

4

The buyer as an individual

................................
................................
...............

4

The buyer as a member of a group

................................
................................
.

4

The buyer as an organisational member

................................
.........................

4

1.4 Exercises

................................
................................
................................
...

4

CHAPTER 2. OV
ERVIEW OF MARKETING AND INTERNATIONAL MARKETING

................................
................................
................................
...............................

5

GOALS

................................
................................
................................
...............

5

2.1 What is marketing?

................................
................................
.......................

5

2.1 Exercises

................................
................................
................................
...

5

2.2 What is international marketing?

................................
................................
...

5

2.2 Exercises

................................
................................
................................
...

5

2.3 Market segmentation

................................
................................
....................

6

2.3 Exercises

................................
................................
................................
...

6

2.4 Consumer decision making

................................
................................
...........

7

2.4.1 Decision complexity

................................
................................
................

7

2.4.2 Stages of buyer decision making

................................
............................

7

2.4 Exercises

................................
................................
................................
...

8

2.5 Consumer behaviour and marketing research

................................
..............

8

2.5.1 Types of market research

................................
................................
.......

8

2.5.2 The relationship between quantitative and qualitative market research

.

9

2.5 Exercises

................................
................................
................................
...

9

CHAPTER 3. INFLUENCES

................................
................................
................

11

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GOALS

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................................
................................
.............

11

3.1 Introduction

................................
................................
................................
.

11

3.2 Individual influences
-

Percepti
on

................................
...............................

11

3.2.1 Implications for marketing

................................
................................
.....

11

3.2 Exercises

................................
................................
................................
.

12

3.3 I
ndividual influences
-

Personality

................................
...............................

13

3.3 1 Implications for marketing

................................
................................
.....

13

3.3 Case study
................................
................................
...............................

13

3.3 Exercises

................................
................................
................................
.

14

3.4 Individual influences
-

Attitudes

................................
................................
..

15

3.4 Exercises

................................
................................
................................
.

16

3.5 Social and cultural influences
-

Group

................................
........................

16

3.5.1 Group influences

................................
................................
..................

16

3.5.2 Group dynam
ics

................................
................................
...................

17

Roles, norms and status
................................
................................
.............

17

Types of groups

................................
................................
.........................

17

Power and g
roups

................................
................................
......................

18

3.5..3 Case study: identificational influences and strategic implications.

......

18

3.5 Exercises

................................
................................
................................
.

18

3.6 Social and cultural influences
-

Family

................................
........................

19

3.6.1 What is a family?

................................
................................
..................

19

3.6.2 The fam
ily lifecycle

................................
................................
...............

19

3.6.3 Types of family buying decisions

................................
..........................

20

3.6.4 Family buying roles

................................
................................
...............

20

3.6 Exercises

................................
................................
................................
.

21

3. Exercises

................................
................................
................................
......

21

CHAPTER 4. CULTURE, LIFESTYLE AND ORGANISATIONAL BEHAVIOUR

..

22

GOALS

................................
................................
................................
.............

22

4.1 Culture

................................
................................
................................
........

22

4.1.1 Definition of culture

................................
................................
...............

22

4.1.2 Values

................................
................................
................................
..

23

Strategic implications for marketing

................................
...........................

23

4.1.3 Customs

................................
................................
...............................

23

Strategic implications for marketing

................................
...........................

23

4.1.4 Language and symbols

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................................
........

23

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Lan
guage and symbols


case studies

................................
......................

23

4.1.5 Organisational culture

................................
................................
...........

24

4.1 Exercises

................................
................................
................................
.

24

4.2 Lifestyle
................................
................................
................................
.......

25

4.3 Organisational behaviour

................................
................................
............

26

4.3.1 Decision making

................................
................................
...................

26

4.3.2 Roles, status and the informal group

................................
....................

26

4.3.3 Power

................................
................................
................................
...

27

4.3 Exercises

................................
................................
................................
.

27

4. Exercises

................................
................................
................................
......

28

CHAPTER 5. INTERNATIONAL CULTURAL ISSUES

................................
........

29

GOALS

................................
................................
................................
.............

29

5.1 The impact of culture on international marketing

................................
........

29

5.1.1 Culturally related factors

................................
................................
.......

29

Knowledge

................................
................................
................................
.

29

Sensitivity

................................
................................
................................
...

29

Collectivism and individualism

................................
................................
....

29

Social conventions

................................
................................
.....................

29

Cognitive styles

................................
................................
..........................

29

5.1.2 Cultural universals

................................
................................
................

30

5.1.3 Elements of culture

................................
................................
...............

30

Material culture

................................
................................
...........................

30

Social institution

................................
................................
.........................

30

Relations with the universe

................................
................................
........

30

Aesthetics

................................
................................
................................
...

31

Language

................................
................................
................................
...

31

5.1.4 Expressions of culture

................................
................................
..........

31

5.1.5 Culture as a collective fingerprint

................................
..........................

31

5.1 Exercises

................................
................................
................................
.

32

5.2 Cultural concepts and cultural differences

................................
..................

33

5.2.1 Key cultural concepts

................................
................................
...........

33

Maslow’s hierarchy of needs

................................
................................
......

33

Context and culture

................................
................................
....................

33

Psychic distance

................................
................................
........................

34

5.2.2 Key cultural differences

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35

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Time

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...........

35

Space

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................................
.........

35

L
anguage

................................
................................
................................
...

35

Familiarity

................................
................................
................................
...

35

Consumption patterns

................................
................................
................

35

Business custo
ms

................................
................................
......................

35

5.2 Exercises

................................
................................
................................
.

36

5.3 Culture and communication

................................
................................
........

37

5.3.1 Ve
rbal communication

................................
................................
..........

37

5.3.2 Non
-
verbal communication

................................
................................
...

37

5.3.2 Cultural adaptation and communication

................................
...............

37

5.3 Exercises

................................
................................
................................
.

38

5.4 Social aspects of the conduct of international marketing

............................

38

5.4.1 So
cial sensitivity

................................
................................
...................

38

5.4.2 Good corporate citizenship

................................
................................
...

38

5.4.3 Climate

................................
................................
................................
.

38

5.4 Exercises

................................
................................
................................
.

39

5. Exercises

................................
................................
................................
......

39

CHAPTER 6. BUYER BEHAVIOUR AND THE INTERNATIONAL MARKET

......

40

GOALS

................................
................................
................................
.............

40

6.1 Relationships and networks

................................
................................
........

40

6.1.1 The Internet and relationships and network
s

................................
........

42

6.1 Exercises

................................
................................
................................
.

42

6.2 Strategic alliances

................................
................................
.......................

43

6.2 Exercises

................................
................................
................................
.

44

6.3 Products and the international context

................................
........................

44

6.3 Exercises

................................
................................
................................
.

45

6.4 International product strategies

................................
................................
...

46

6.4 Exercises

................................
................................
................................
.

46

6.5 Modifying products for overseas markets

................................
...................

47

Product standards and regulations

................................
.............................

47

Measurement and calibration

................................
................................
.....

47

Trademarks

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................................
................................

47

Climate and usage

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................................
.....................

47

Language and symbolism

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47

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Style design and taste

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................

47

Technology issues and performance standards

................................
.........

47

Warranty and servicing issues

................................
................................
...

48

6.5 Exercises

................................
................................
................................
.

48

6.6 Marketing services in the international marketplace

................................
...

48

6.6.1 Nature and growth of servi
ces

................................
..............................

48

6.6.2 Drivers of internationalisation of services

................................
.............

49

Company level

................................
................................
...........................

49

Industry level

................................
................................
..............................

49

6.6.3 Marketing services internationally


issues
................................
...........

49

6.6 Exercises

................................
................................
................................
.

50

6.7 Promotion in international markets: factors in international communication

50

6.7.1 Constraints in international marketing communication

.........................

50

6.7.2 Factors in international communication

................................
................

51

6.7.3 Pull strategies in international promotion

................................
..............

51

Advertising

................................
................................
................................
.

5
1

Publicity and public relations

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................................
......

51

6.7.4 Push strategies in international promotion

................................
............

51

6.7 Exercises

................................
................................
................................
.

52

6.8 The context of international strategic market planning

................................

52

6.8 Exercises

................................
................................
................................
.

53

6.9 Steps in the international marketing planning process

................................

54

6.9 Exercises

................................
................................
................................
.

54

CHAPTER 7. LEGAL AND ETHICAL ISSUES

................................
.....................

55

GOALS

................................
................................
................................
.............

55

7.1 The role of government in intern
ational marketing

................................
......

55

7.1.1 Different types of national governments

................................
...............

55

7.1.2 The role of government in the economy

................................
...............

55

7.1 Exercises

................................
................................
................................
.

56

7.2 Political approaches in international marketing

................................
...........

56

7.2

Exercises

................................
................................
................................
.

56

7.3 Political stability and risk

................................
................................
.............

57

7.3.1 Sources of political instability

................................
................................

57

7.3.2 Nature of political risk

................................
................................
...........

57

7.3.3 The trade
-
off

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.........................

57

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7.3 Exercises

................................
................................
................................
.

58

7.4 Managing the overseas political environment

................................
.............

58

7.4 Exercises

................................
................................
................................
.

59

7.5 The legal environm
ent

................................
................................
................

59

7.5 Exercises

................................
................................
................................
.

59

7.6 Differing legal systems and jurisdictions

................................
.....................

60

7.6.1 Legal systems

................................
................................
.......................

60

7.6.2 International law

................................
................................
...................

60

7.6.3 Legal jurisdiction

................................
................................
...................

60

7.6 Exercises

................................
................................
................................
.

61

7.7 Law and the marketing mix overseas

................................
.........................

61

7.7.1 Product

................................
................................
................................
.

61

7.7.2 Price

................................
................................
................................
.....

62

7.7.3 Distribution

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................................
............................

62

7.7.4 Promotion

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................................
.............................

62

7.7 Exercises

................................
................................
................................
.

62

7.8 International legal issues for marketing

................................
......................

63

7.8.1 Intellectual property protecti
on

................................
..............................

63

Case study: China and IP protection

................................
..........................

64

7.8.2 Environment

................................
................................
.........................

65

7.8.3 Human resources

................................
................................
.................

65

8.8 Exercises

................................
................................
................................
.

65

8.9 Ethical issues for international marketing

................................
...................

66

8.9 Exercises

................................
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................................
.

67

REVISION EXERCISES

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68


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UNIT OVERVIEW

This unit specifies the outcomes required to analyse consumer behaviour for
specific international markets.

This unit addresses the application of knowledge and skills to confirm the target
market, assess the current level of consumer interest, and document and develop
recommended marketing strategies.


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CHAPTER 1. INTRODUCTION
-

O
VERVIEW OF CONSUMER /
BUYER BEHAVIOUR

GOALS

When you have completed this chapter you will be able to:



Understand the basic concept of consumer behaviour



Understand the difference between consumer behaviour and buyer
behaviour

1.1 The marketing concept

Duri
ng the second half of the twentieth century, the
marketing concept

emerged
as the foundation of all marketing activity. Sellers attempted to understand the
benefits of a product which were most valued by consumers, and so could
develop products which more

closely matched what consumers wanted. If
successful, an increased market share was gained.

Further, by understanding the benefits required by consumers, competing
producers could now specialise by providing specific product advantages to
subsections of

the market. These subsections are referred to as
market
segments
. Designing products and marketing messages to appeal to a given
segment is referred to as
market positioning
.

The
marketing mix

provides the four key elements of the marketing strategy t
o
implement a chosen marketing positioning. These elements are referred to as
the
four Ps: Pricing, Promotion, Packaging and Place (or distribution)
.

1.1 Exercises

















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1.2 Consumer behaviour

Consumer behaviour

refers to the systematic analysis

of human behaviour
relevant to marketing, together with the strategic implications of this analysis. The
study of human behaviour attempts to make generalisations about human nature
will help our understanding of the behaviour of social groups and indivi
duals. Such
a generalisation is known as a
behavioural principle
.

A behavioural principle can then be applied strategically. For example, an
advertisement may use the slogan “The world’s favourite airline’ in an attempt to
influence some individuals to
conform, and thus buy. This is based on the
behavioural principle which describes the tendency of some individuals judgments
to conform with others in a group.

1.2 Exercises











1.3 The difference between consumer behaviour and behaviour

Most of th
e time, these terms are interchangeable. But strictly speaking,
buyer
behaviour

focuses on the behaviour of the buyer, while
consumer behaviour

focuses on the consumer.

In most consumer and buyer are one and the same person. But, for example, in a
fami
ly situation, they often separate: the mother may buy the family’s toothpaste
on behalf of all members of the family. In a corporate environment, the buyer may
be completely separated from the product’s use.

1.3 Exercises










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1.4 Categories of buyer
and consumer behaviour

Buyers consume both as individuals and members of groups. We can categorise
this as follows:

The buyer as an individual

The buyer / consumer is in many situations acting individually. It is important to
understand the way that indiv
iduals think and learn about their commercial
environment. Most products are of little interest to these individuals. What will
attract them to a specific product?

The buyer as a member of a group

Individual buyers / consumers belong to a range of groups
: families, social class,
and subcultures such as teenage cults.

Group membership affects buyer behaviour in a number of ways. One of the
most important groups is the family. Families consume products as a group:
breakfast cereals, entertainment, holiday
s and cars for example.

The buyer as an organisational member

In cases where a purchase is made by an individual or group on behalf of an
organisation, the buyer and consumer are generally quite separate.

Underlying reasons for purchase decisions in such

an organisational environment
may go beyond the perceived benefits of the product. Other reasons may include,
for example, the need for certainty and supply, group pressures and conformity,
the need for job security or the need to climb the corporate lad
der.

1.4 Exercises

















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CHAPTER 2. OVERVIEW OF MARKETING AND INTERNATIONAL
MARKETING

GOALS

When you have completed this chapter you will be able to:



Understand the basic concept of marketing



Understand the basic concept of international marketi
ng



Understand market segmentation

2.1 What is marketing?

Here is a definition of marketing which encapsulates the modern idea of the
marketing concept:

Marketing is a system of business activities aimed at achieving organisational
goals by developing, pric
ing, distributing and promoting products, services and
ideas that will satisfy customers’wants.


2.1 Exercises











2.2 What is international marketing?

International marketing

is the process of planning and undertaking transactions
across national b
oundaries that involve exchange. Its forms range from exporting
to licensing joint ventures to wholly owned acquisitions to management contracts.
Because the transaction takes place across national boundaries, the international
marketer is subject to a d
ifferent set of macroenvironmental factors and
constraints deriving from different political systems, legal frameworks, cultural
norms and economic circumstances.

2.2 Exercises





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2.3 Market segmentation

Competing suppliers often attempt to secur
e a share of the market by designing
their product according to the preferences of part of the market. Rather than
aiming at all potential customers and taking other competitors head on,
companies often secure a foothold in the market by targeting a sectio
n of that
market and specialising in features that appeal to its members. This process is
called
market segmentation
.

Buyers may be categorised in many ways to derive a market segmentation.
Some of the main ways are as follows:

Basis for segmentation

Seg
mentation criteria

Demographic

The market population is divided on the basis of criteria such
as: age; income; education; location etc.

Benefit

The market population is divided according to the different
uses that consumers make of a different product, o
r the
different needs that a product may satisfy.

Psychographic

The market populations is divided according to differences
such as lifestyle or personality characteristics of its members.

Response elasticity

The market population is divided according to
the
effectiveness of applying market strategies such as buyers’
responsiveness to price changes or advertising campaigns

Behavioural

The market population is divided on the basis of such things
as level of usage, brand loyalty, etc.


2.3 Exercises











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2.4 Consumer decision making

Today, most products are regarded as not holding enough buyer interest to
involve buyers in a great deal of thought or analysis before making a purchase
decision. These products are described as
low involvement (LI).

Th
ose
products that hold a great deal of interest for the consumer, so that they are likely
to expend more thought and effort into finding out about the product before
purchase, are called
high involvement (HI)
.

2.4.1 Decision complexity

The level of involve
ment affects the complexity of the buying decision. Other
factors include: level of familiarity; risk; extent of previous purchases of the same
or related products.

The level of complexity associated with purchases can be represented by three
categories:

1.

Routinised response
: the consumer makes a purchase automatically, or
with little thought.

2.

Limited problem solving:

the consumer has developed a shortlist of
products for consideration, and needs to search for, evaluate and decide
among the final candidates
.

3.

Extensive problem solving:

the consumer develops a shortlist of products,
but, because of lack of product knowledge, or high risk (economic, functional
or psychological), the consumer undertakes an extensive search and
evaluation prior to purchase.

2.4.2

Stages of buyer decision making

There are four stages of buyer decision making:

1.

Need recognition:

with this stage, marketers are concerned with the
circumstances which trigger the decision to make a purchase. Is it because
a regularly purchase product su
ch as toothpaste has run out? Is it because
of a change in a consumer’s needs, such as a new baby arriving? OR is the
consumer bored and wants a change?

2.

Prepurchase search:

once the buyer has decided to make a purchase, the
next stage consists of looking

around for a suitable product. This may be a
simple response, such as when buying a favourite product, or it may be
more complex, such as when buying a new computer.

3.

Evaluation of alternatives:

once the buyer has found the suitable
alternatives, and deve
loped a shortlist, they will evaluate each of the
products on the shortlist. For LI products, this evaluation may be
straightforward, or even trial and error. With HI products, requiring more
complex decisions, the evaluation may be very detailed and tim
e consuming.

4.

Purchase and post purchase:

The final stage consists f the purchase
itself, and post purchase. Post purchase relates to things such as repeat

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purchase, complaint behaviour, and favourable or unfavourable word of
mouth informal communications
.

2.4 Exercises


















2.5 Consumer behaviour and marketing research

As we discussed earlier in Section 1.1, fundamental to the marketing concept is
an understanding of consumers and their needs. Marketers use
market research

to find out consum
er preferences and habits in order to satisfy the demands of the
market with suitable products.

2.5.1 Types of market research

There are two main types of market research:

5.

Quantitative research:

is research for which the responses can be tallied,
counted
and analysed numerically. Quantitative market research makes use
of, for example, questionnaires which require specific responses: yes/no; or
highly likely / likely / unlikely / highly unlikely.

6.

Qualitative research:

is research which is based on techniqu
es such as
discussions, questions seeking unstructured, open ended answers.
Responses are verbal or written statements, rather than quantifiable forced
choices. The intention is to uncover, in the responses of consumers,
relevant or unexpected informatio
n which may not be found by quantitative
research

There are three standard forms of qualitative research:


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Depth interviews,

or personal one
-
to
-
one interviews. These
interviews are usually unstructured so as to leave open as many
opportunities as possible
for the uncovering of useful but unexpected
information and opinions


Projective techniques

require respondents to give their interpretation
of stimuli such as a picture or a statement. The respondent’s
‘projection’ is then interpreted by the researcher.


F
ocus groups
, where 6 to 12 participants are encouraged, by a
moderator, to discuss a product in an unstructured and informal
manner. Focus groups allow respondents to stimulate each other with
their ideas and hence are likely to take the discussion into a

wide range
of areas. Moderators encourage interactions.

2.5.2 The relationship between quantitative and qualitative market research

Qualitative research is often undertaken before quantitative research. This
allows the market researcher to explore a br
oader range of attributes which then
help in designing quantitative questionnaires.

Qualitative techniques are very useful to early exploratory probing because they
are open to a broad range of responses.

Quantitative techniques, based on properly construc
ted questionnaires, can be
easily used for large numbers of respondents and so provide statistical validity to
the results.

2.5 Exercises

1.

Identify two advertisements that appear in print or electronic media. One of
the ads should be based on a physical n
eed such as thirst or sex. The other
ad should be based on a need that does not have an obvious physiological
basis. Examples might include the need to achieve, the need for security, or
the need for love and acceptance. For each ad, outline what need y
ou think
the ad is based on.















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2.

TV/DVDs/the Internet and an increase in the number of families wih both
parents working have had an impact on traditional family lifestyles,
especially the evening meal. Discuss ways in which eating habits have
c
hanged within the family household. Identify examples of changes in the
packaging and distribution of food products resulting from these trends/



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CHAPTER 3. INFLUENCES

GOALS

When you have completed this chapter you will be able to:



define and describe th
e nature of sensation and perception



outline the processes of selective perception and perceptual organisation,
and explain their relevance to buyer behaviour



understand the application of theories and concepts of personality to
marketing



describe the natu
re and formation of consumer attitudes



relate consumer attitudes to buyer behaviour



understand group dynamics and how group contexts affect buyer behaviour



outline the strategic implications for marketing of group influences



identify the implications of fa
mily membership for marketing strategy



identify the stages of the family life cycle and their strategic implications for
marketing


3.1 Introduction

Consumers in most of the world’s economies are being continually bombarded
with advertisements. And in su
permarkets, the vast number of packages on
shelves also compete for the buyer’s attention as well as their disposable income.

Consumers have adapted to this overwhelming presence of market stimuli
generally take it for granted. Most products can also be d
escribed as low
involvement (LI). So how can marketers in these situations gain the attention of
the buyer?

3.2 Individual influences
-

Perception

Perception refers to an individual’s relationship with the external environment, and
in particular the recep
tion and response to stimuli such as light, sound and smell.
Perception involves the individual actively imposing order on their experience of
external stimuli, through selection and filtering, then organising the stimuli that
have been accepted into a me
aningful pattern which can then be interpreted. The
interpretation give the overall perception a sense of meaning.

3.2.1 Implications for marketing

The environment which makes up a consumer’s experience of commercial stimuli
contains a great deal of simil
arity and contrast.

One approach by marketers is to attempt to distinguish their packaging by giving it
an appearance which contrasts with their competitors, to make it stand out from
the others. This approach is particularly used by market leaders.

The

other approach, taking advantage of the similarity of many stimuli, is to
choose packaging designs which ‘fit in’ to established figures represented by

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market leaders. In other words ‘Me
-
too’ products take advantage of the principle
of similarity, where
perceivers tend to combine like objects into a single figure.

Other perceptual influences used by marketers are concerned with the
interpretation of external stimuli by individuals. These applications of perceptual
influence include:

Projection

The tenden
cy of the perceiver to see aspects of themselves in other people
and their environment. Our emotional state and underlying motives may also
influence the way we see products and other people.

Expectations

What we expect to see or hear may have a distorti
ng influence on our
perception of products or individuals.

Attractiveness

Research suggests that attractiveness among males is an advantage when
used to promote most products. Attractiveness is an advantage among
females when used to promote LI products
or psychological products such as
clothes or toiletry, but a disadvantage for products where technical expertise
or some authority are important.

Height

Taller males are seen as having more authority than shorter males.

Similarity

Perceivers are favourab
ly inclined to those who are similar to them. Some
products, such as home
-
loan finance, washing powder and power tools, are
often promoted using a ‘typical’ type with whom a broad range of people can
identify.


3.2 Exercises

1.

Collect advertisements from
newspapers or magazines that attempt to gain
buyers’ attention by some or all of the perceptual influences mentioned in
this section.

















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3.3 Individual influences
-

Personality

Do cars have personalities? According to a recent newspaper articl
e
-

‘You are
what you are drive’ the car you drive reflects the type of person you are.

Such considerations can affect our attitudes as consumers and buyers, and how
they are used by marketers.

We commonly use the word ‘personality’ to refer to someone w
ho may be
described as ‘outgoing and entertaining’. Technically, though, the term
personality

applies to
all

individuals, and refers to the type of person they are
-

quiet, friendly, domineering, etc. People are also consistent in their display of
their
own personality. Personality also influences the way individuals react in
particular situations.

So personality is used to construct personality types, which characterise groups of
people with a similar personality. Single characteristics, such as ‘warm’
, are
referred to as
traits
.

3.3 1 Implications for marketing

There is some controversy in the usefulness of personality theory in predicting
buyer behaviour.

Most products are LI, and do not strongly relate to a consumer’s personality type.
But we can un
derstand how personality is related to products such as cars and
clothes.

However, there are some applications which apply to most products, that is,
differences in the way individuals process information and make decisions. These
factors serve as a guide

to advertising and packaging strategy.

And personality may also be applied to market positioning and segmentation. For
example, car advertising and design may aim its product at a particular type of
person, or at what the buyer might aspire to be.

Trai
ts, single personality characteristics, have also been used to attempt to predict
or influence buying behaviour, but mostly without success.

Successful marketing applications developed after the conceptualisation of the
traits themselves had been made more

suitable to given products and other
aspects of consumer behaviour. Rather than using standard categories,
researchers developed product
-

and consumer
-

specific characteristics. These
have included useful predictors of buyer behaviour for such products
as
cosmetics, detergents, home computers and alcohol.

3.3 Case study

To describe different types of drinkers, the beer producer developed categories
based on introversion and extroversion. Research identified three reliable
categories:

a.

Reparative
: These d
rinkers tend to be middle
-
aged. They have some sense of
achievement due to their life’s efforts but are not fully satisfied with their
achievement levels. Such drinkers are described as controlled and see
drinking as a type of reward.


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b.

Social
: Social drin
kers tend to be young adults. Drinking is seen as a form of
having fun and important for career politics. Hence, the social aspects and
‘making contact’ for advancement are seen as important ends.

c.

Indulgent
: These drinkers see themselves as failures. Th
ey have a pessimistic
view of life. Indulgent drinkers use alcohol as an ‘escape’ and can become
heavy drinkers when under pressure.













3.3 Exercises



















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3.4 Individual influences
-

Attitudes

Individuals often form views on aspects o
f their environment such as politicians,
movies, products and organisations without necessarily forming these views in a
logical way. The term
attitude

refers to the way in which a persons orientates
themselves to aspects of their environment. Attitudes
are sometimes described
as short cuts for evaluating an object’s benefit or possible harm, usefulness, or
support, for example, by individuals.

We seem to have this mechanism which evaluates elements in our environment,
which makes us feel positive or nega
tive about things. Attitudes are also social
-

we tend to be attracted to those with similar attitudes.

Marketers are in the business of managing attitudes.

The definition of attitude can be broken down into the following elements:

An attitude must have a
n
object

An attitude refers to the way we orientate ourselves to elements in
our environment. An object need not be tangible
-

it could refer to a
situation, religion or a political belief. For marketers, important
attitude objects include products.

An
attitude must be
evaluative

That is, an individual’s predisposition towards the object ust be
either favourable or unfavourable. Marketers want potential buyers
to have a positive attitude to their good or service as well as towards
other aspects relevant

to marketing such as advertising, packaging,
or the company itself.

An attitude is learned

Attitudes are gained through our experience rather than being
inherited biologically. So marketers encourage the learning of
favourable attitudes towards their pr
oducts.

An attitude is consistent

While attitudes may change, they have a tendency to be stable.
Understanding the nature of attitudes enables marketers to attempt
to change attitudes more effectively.


Attitudes have three
components
. These are:

1.

Affec
tive component

An attitude is an abstract concept. they express
themselves in statements like “I can’t stand people who smoke in my
presence.” The person is making a statement about the way he or she feels
towards the object of the attitude, the act of
people smoking in his or her
presence. Expressions of feelings like this are referred to as the affective
component of an attitude.

2.

Cognitive component

There may also be other expressions of the attitude,
such as the statement “Passive smoking is highly
detrimental to your health
-

people should not smoke in the presence of others.” The first part of this
statement represents an expression of belief. This expression is referred to
as the cognitive component
-

it indicates what the person believes about
the
object of the attitude.

3.

Behavioural component

The person smoking could be asked to put the
cigarette out. The person holding an anti
-
smoking attitude might also
display anti
-
smoking stickers in his or her home and office. Here, the
attitude is expre
ssed through what the person does, through behaviour.
Thus, this expression is called the behavioural component.


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3.4 Exercises

1.

Identify the three attitude components in the following description of an
attitude. Jenny bought the new Mitsubishi Hatchback.

She felt so good
about her purchase that she couldn’t resist talking about it to her friends.
She also drove it around as often as she could when she first got it. She
claimed that her vehicle was economical while giving a reasonable
performance.













3.5 Social and cultural influences
-

Group

There are many situations where buying decisions are made by an individual who
is a member of a group, such as a family, an organisation, a social group etc. In
these situations, the individual takes on a
different role, which may be formal or
informal. In an organisation, the role would be formal as in Purchasing Officer; in
families the role would be informal, for example, a mother buying clothes for her
children, and buying patterns and behaviour are di
fferent to those of the individual
as a consumer. So marketers need to understand group buying behaviours, and
the contexts of group buying behaviours.

These group contexts include:



families



organisations



market segments, such as class, teenage subculture
s, groups with similar
values and lifestyles etc.



informal buying networks such as social networks, where consumers use
word of mouth communication, observation of others using particular
products or respond to group pressures to make their buying decision
s.

3.5.1 Group influences

In all these group contexts, the key question is to understand how the group and
its dynamics influences buying patterns of group members. There are four major
ways in which this can happen:


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1.

The normative influence
: social pressu
re and conformity

2.

The informational influence
: individuals gain product knowledge informally,
through word of mouth or observation

3.

The identification influence
: an individual’s sense of identify is derived by
referring to particular social groups
-

success
ful business people, teenagers,
etc.

4.

The influence of roles
: Individuals take on different roles, formal or
informal, in different groups

It is important it clearly distinguish between normative and identification
influences. Conformity refers to the be
haviour of individuals resulting from group
pressure, where an individual would behave in another way in the absence of that
pressure.

Each of these influences has important strategic implications for marketing.

3.5.2 Group dynamics

Group dynamics can be d
escribed in several ways:

Roles, norms and status

Roles

are defined as the behaviour that is expected of a member of a group by
other members, whether that role is informal or formal

Status

refers to a group member’s informal ranking as seen by other group

members. High status member have more informal power than those with a lower
status.

Norms

refer to a group’s unwritten rules of behaviour as expected by group
members.

Types of groups

Group and aggregate
: an aggregate simply refers to any collection of
individuals.
A group is an aggregate which has a significant influence on members’ and non
-
members’ behaviour.

Primary groups and secondary group
: a primary group refers to a small group
where members derive emotional support from each other
-

eg. a famil
y. A
secondary group is a larger group which usually refers to an individual’s
acquaintances.

Formal group and informal group
: A formal group, like an organisation, is
structured. Note that members of a formal group can have both formal and
informal rol
es. Informal groups, such as a group of tennis players, has no formal
structure.

Small groups and large groups:

a small group is essentially a face to face group.
A large group, such as all members of a profession like accounting, are widely
dispersed.

Membership group and aspirational group:

an individual does not need to be a
member of a group for that group to have a significant influence on one’s
behaviour. Aspirational groups have lifestyle and attitudinal characteristics that
non
-
members aspire t
o.


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Reference group
: refers to a collection of individuals that serves as a point of
comparison for members and non
-
members for their sense of identity, values, life
style and attitudes.

Power and groups

The power individual members have within their groups

is related to roles and has
implications for the roles various individuals play in a group purchase process.
Relevant bases for social power are:

Referent power:
is derived from other group members identifying with the power
holder. It applies to identi
ficational group influences and is seen as an aspect of
the informal group.

Expert power:

derives from the power holder having more knowledge and
expertise about a product and its use than other group members.

Reward power:

stems from the power holder occu
pying a formal position of
authority, allowing them to influence behaviour by giving rewards.

3.5..3 Case study: identificational influences and strategic implications.

The strategic implications associated with identificational influences mainly
include
product design and the use of testimonials. Testimonials could come from
known personalities representing a reference group, such as the tennis player
Martina Hingis endorsing Omega watches. These spokespersons are seen as
having referent power.

Marketers
, when designing and advertising products, must be aware of the
potential personality of the product. For example, Volvo successfully segmented
a small conservative safety
-
conscious market. But when they tried to expand
their market to compete with other

luxury cars such as BMW and Saab, they
found that their image was too conservative, and the cars had a boring personality
for many consumers.

3.5 Exercises















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3.6 Social and cultural influences
-

Family

The family unit represents a social group
where members resolve their economic
problems collectively. Understanding the nature of group decisions is important
when marketing to such groups.

Keep in mind that a lot of goods and services are consumed by families as a
collective consumer unit. Un
derstanding the nature of family decisions is vital to
good marketing strategy. By understanding who dominates and participates in
the decision we are given a clue as to choice of media, message design,
packaging and product design, and to some extent str
ategy regarding distribution
outlets. For example, if the husband tends to dominate a purchase decision for a
given item, we would choose media appropriate to male adults for our advertising.

There is an additional complexity: the buyer and consumer are n
ot necessarily
one and the same person. Marketers now have to be aware of both the buyer’s
and consumer’s behaviour.

The family can also be considered an important reference group. Parental
consumer patterns and choice of products such as luxury goods wh
ich are
affected by luxury good influences have a considerable influence on the following
generation.

3.6.1 What is a family?

One definition of a family is that it comprises:



a group of individuals forming a collective economic unit, which



is centred aroun
d a single household, and



whose members are likely, but are not always, connected to each other by
blood ties or marriage

There are several types of family:



Nuclear family

with two parents and up to 2 or 3 children



Extended family

in which two or more gen
erations share the same
household. Extended families may also include aunts, uncles, cousins and
in
-
laws



Composite family

consists of member of several families sharing a
household, for example a mother, her natural children, her new partner and
his child

from a previous family unit



Single parent families
consists of one parent, usually the mother, with her
child/children

3.6.2 The family lifecycle

There is a developmental life cycle followed by typical family units. As families
move from one stage of the

life cycle to the next, disposable income, the products
consumed, and the nature of buying decisions all change.


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The standard family life cycle consists of the following stages:

Family Life Cycle

Descriptor

Young single

Young adults living independently

Married without children

Usually both partners are working

Married with children

Full nest I

Full nest II

Full nest III


Young married with children

Older married with children

Middle aged with dependent children

Post
-
parenthood

Empty nest I

Empty nest

II


Middle aged without dependent children

Older retired

Dissolution

Working single

Elderly

Non
-
working single elderly


In most developing and developed societies, this life cycle and its composition are
constantly changing.

3.6.3 Types of family buyi
ng decisions

Buyer behaviourists identify four types of family buying decisions:

1.

Individual decisions
: the individual makes decisions without input from
other family members

2.

Group decisions
: the husband and wife jointly make the buying decision.
At some l
ife cycle stages and for some products (eg. family holidays) the
children can also be involved in the decision making.

3.

Husband dominated

4.

Wife dominated

3.6.4 Family buying roles

Buyer behaviourists identify 6 important roles acted out by family members in
the
buying process:

1.

Gatekeepers / information gatherers: acted out by the person(s), involved in
gathering information and perhaps also information controlling. Usually the
person(s) with product expertise and knowledge.

2.

Users: the family members who are
end users. They usually initiate
purchase ad repeat purchase, and are influential when alternatives are
considered.

3.

Influencers: During the evaluation of alternatives stage, the family member
who establishes the buying criteria. For a particular product
there may be
several influencers. For example, with a whitegoods product, the mother
may influence functionality aspect, and the husband the durability aspects.

4.

Deciders: the family member(s) who dominate the final purchase choice.

5.

Buyers: the member(s) w
ho actually makes the final purchase.


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6.

Maintainers: For some products, this role refers to the person who is
responsible for the preparation and maintenance of the product.

3.6 Exercises

1.

Outline 3 strategic marketing implications where product categories h
ave
been found to be significantly influenced by children










3. Exercises



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CHAPTER 4. CULTURE, LIFESTYLE AND ORGANISATIONAL
BEHAVIOUR

GOALS

When you have completed this chapter you will be able to:



explain the importance of understanding culture to

marketers



outline the understanding of values, customs and shared meaning to
marketing strategy



understand the categorization of lifestyles, and the implications for marketing



describe the nature of group decisions in an organisational context



outline the

strategic implications of the functioning of both formal and
informal groups for organisational marketing

4.1 Culture

Understanding culture and its application to marketing as a mechanism used by a
marketer to influence consumer behaviour is very importan
t to successful
marketing, particularly in the international context.

Culture is integral to the marketing concept which is based on the satisfaction of
the wants and needs of potential buyers. Not only does culture condition those
wants and needs, but it

also influences the way messages concerning the ability
of a product or service to satisfy the wants and needs are received and
interpreted.

4.1.1 Definition of culture

Defining culture has always been difficult. One definition is:

Culture refers to the
values, customs, shared language and symbols and shared
beliefs that are held by a collection of people, and which have developed through
the members’ proximity to each other over an extended period of time.

Some of the characteristics of definitions of cu
lture are:



culture is
prescriptive

in that it prescribes those forms of behaviour that
are acceptable to people in a specific community



culture is
learned

because people are not born with a culture, but are bon
into

a culture



culture is
dynamic

because not

only does it influence our behaviour but, in
turn, our behaviour influences the culture reflecting its interactive nature



culture is

subjective

because people attribute meaning to issues on a
subjective basis and these subjective meanings develop within t
he context of
the culture

Hofstede adds a further distinction where cultures can be seen as having an
individualistic or collectivist orientation. An
individualistic culture

is one where
its members see themselves as unique individuals and value separatin
g one’s self
from others. Americans represent an example of an individualistic culture.

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Members of a
collectivist
culture see themselves as inseparable from others.
Chinese and Japanese represent examples of collective cultures.

4.1.2 Values

Values

refe
r to what members of a given culture agree are good or desirable and
which hold a high position among members’ scale of preferences. For example,
members of Chinese culture value education.

Strategic implications for marketing

There are numerous examples
of marketers and their misunderstanding of values,
particularly in the international context.

One example is about a failed attempt to export an artificial whipped dessert
cream to Sweden. Promotion was completely wasted due to the marketers
ignoring cult
ural values. Why? Because Swedish consumers take great pride in
their desserts and place great importance on expending time and energy to
prepare a dessert. These aspects held preference over the convenience of the
product.

4.1.3 Customs

Customs

refer t
o appropriate behaviour in particular situations as guided by a
culture’s values. For example, expected behaviour at one’s first meeting with
another person. In a European context, one would shake hands. In a Japanese
context, one would bow their head s
lightly.

Strategic implications for marketing

A toiletry advertisement from Proctor and Gamble promoting a luxury bath soap
was successful in the United States and Australia, but failed in Japan. The ad
showed a man explicitly complimenting a woman’s appe
arance. While this is
customary in European cultures, it is in fact considered inappropriate among
Japanese.

4.1.4 Language and symbols

Members of the same culture identify other members through common language,
those that can be understood


in other wor
ds, they share a sense of meaning.
Furthermore, it is difficult to find the exact translation of certain words from one
language to another.

One executive has recommended learning the language of a country if you want
to sell to that country: “Language
is an expression of culture so if you master the
language you can already understand part of the culture.”

Non
-
verbal symbols also hold the same importance in each culture. Marketers
should be aware of the meaning of non
-
verbal symbols such as colours, nu
mbers
and shapes.

Language and symbols


case studies



A reply of ‘yes’ from a Japanese executive may mean that he or she has
understood the proposition, and is not necessarily an affirmative reply.



Words used as brand names may have an offensive meaning in

other
languages. ‘Cue’ is the word for one’s posterior in French


a highly
inappropriate brand name for toothpaste in France.


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4



The number ‘7’ has a positive feel in Western societies, for example ‘7/11’
and ‘7
th

heaven’. The number ‘8’ has a very positi
ve feeling among Chinese
and symbolizes continuity.



Red is masculine among English and other Westerners


it evokes strength
and danger. A bold red is appropriate for the packaging of male toiletry
products. Red symbolises tranquility in the East. Bride
s wear red in china
and Vietnam.



Black is the colour of death associated with Western funerals. White
represents death in Eastern Asia. There are few white cars in China


a
popular colour in the West.

4.1.5 Organisational culture

We also think of organi
sations as having their own culture. As marketers to
organisations, understanding organisational culture influences sales strategy.

The definition of organisational culture is similar to that of culture.
Organisational culture

refers to the values, shar
ed meaning and norms that
distinguish organisations from each. Norms here refer to the unwritten rules and
acceptable behavioural conventions in different situations

Individuals may identify with an organisation and its unique culture. Organisations
also

develop cultural symbols such as logos, house colours, in
-
house publications
etc.

4.1 Exercises




















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4.2 Lifestyle

Lifestyle is a subject of much consumer research, to determine for example
categories of psychographic segmentation. Lifestyle

involves a consumer’s
Activities, Interests and Opinions. Some of the variables used to profile lifestyle
are:

Activities

Interests

Opinions

Work

Family

Themselves

Social events

Home

Social issues

Social events

Job

Politics

Vacations

Community

Busin
ess

Entertainment

Recreation

Economics

Club membership

Fashion

Education

Community

Food

Products

Shopping

Media

Future

Sports

Achievements

Culture

Psychographic segmentation then identifies groups within a market population
that roughly share similar

lifestyle profiles.

VALS


Values and Lifestyles Segmentation


is a similar way of profiling society
into homogeneous groupings.

A recent VALS study in Australia divides Australians into five segments as follows:

Strivers

Median age 29. described as bot
h materialistic and narcissistic. Value
success which is defined in terms of materialism and wealth. Consumer
patterns include convenience shopping, price insensitivity, fast food.
Conspicuous consumers and appearance conscious.

Achievers

Median age 33
. Members value attaining a high status combined with
security. They also value sophistication as an important part of self
-
image.
High proportion of ‘new’ women. Nutrition conscious and buy high quality
food. Consumers of high tech products both at ho
me and work.

Pressured

Median age 54. Described as anxious and guilty, and having a sense that life
has not been very kind to them. They are lonely and tend to believe that thy
are not in control of their lives. Low incomes. Own pets. The value nutri
tious
food and spend on pet food and chocolates. Avid television watchers.

Traditionals

Median Age 61. Described as having rigid values and hold conservative
views. Are nostalgic and would like the return of earlier more wholesome life
patterns. Conser
vative consumers and value the security of tried and tested
brands. Products which give security and stability are valued.

Adapters

Median age 55. Described as contented and tolerant, although tend to
maintain traditional values. Are comfortable and te
nd to maintain traditional
values. Are comfortable and relatively secure. They are capable of
involvement in change. Nutrition and fitness are valued.



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4.2 Exercises



















4.3 Organisational behaviour

In most of what has been said, there h
as been little difference between ‘buyer
behaviour’ and ‘consumer behaviour’. However, in the case of organisational
buying, the buyer and user are very likely to be different individuals.

In organisational buying the buyer is usually very removed from th
e
user/consumer, with the user/consumer perhaps playing a minor role, or no role,
in the purchaser’s decision.

4.3.1 Decision making

We have already discussed, in Section 3.5 above, the characteristics of groups
and their decision making.

One further disti
nction that can b made, in the organisational context, is between
compensatory and non
-
compensatory buying decisions. A
compensatory
decision

applies when a buyer weighs up all the advantages against all the
disadvantages of product benefits and attribute
s. A
non
-
compensatory
decision,

however, applies other rules for decision making. For example, when
decision makers establish minimum acceptable standards for agreed product
attributes.

4.3.2 Roles, status and the informal group

As discussed earlier, ind
ividuals in a group are influenced in a number of
important ways.


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Roles apply to buyer behaviour in an organisational context just as they apply to
general behaviour in a group context. Two major roles are involved: formal and
informal. Formal roles refl
ect organisational structures and defined job
descriptions. Informal roles reflect the expectations of the organisational
members themselves, and may never become formalised.

Informal roles

Formal roles

Users:

Organisational members who actually
use or h
ave direct contact with the good or
service being purchased. Individuals in this
position may be consulted by members with a
more formal role in the purchase.

Ideal initiator:

Recognises the need and
suggests the purchase.

Influencers:

Those who play an a
ctive part in
the decision but have no formal power. For
example these may include members who have
technical interests or expertise.

Financial controller:
Decides whether the
organisation can afford the product and/or
whether the purchase results in cost

effectiveness.

Gatekeepers and buyers:

Purchasing officers
who ma conduct formal search, gather
information and conduct clerical procedures
required to effect to effect the purchase.

Deciders:

Supervisor or manager of relevant
department who may perform a
n active role.


4.3.3 Power

In organisational buying, the types of power are expanded to the following:



Reward power



Coercive power



Legitimate power



Referent power



Expert power



Informational power



Departmental power

4.3 Exercises














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4. Exercises



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CHAPTER 5. INTERNATIONAL CULTURAL ISSUES

GOALS

When you have completed this chapter you will be able to:



appreciate the impact of culture on international marketing



apply key cultural concepts when evaluating international marketing
situations

5.1 The im
pact of culture on international marketing

In Chapter 3 we discussed culture and the ways in which it influences consumer
behaviour. Here, we continue this analysis to consider the impact of culture on
international marketing, and how marketers can use th
is for international
marketing activities. A number of factors must be taken into account.

5.1.1 Culturally related factors

Knowledge

Knowledge of another culture can be either factual or interpretative. Being able to
appropriately interpret a fact withi
n the context of another culture can add great
significance to the fact.

Sensitivity

Cultural sensitivity involves being aware of the nuances of the different culture,
being empathetic with it and viewing it empathetically. Associated with this
sensitivit
y is the need for the international marketer to evaluate the relevance of
cultural assumptions being used, particularly if those assumptions are embedded
in the marketers own culture.

Collectivism and individualism

In many Asian cultures, collectivism play
s a major role in decision making,
because of the strength of family ties, strong affinity with the group to which the
individual belongs, and sensitivity to the wishes of other members of the network.
However, this is not the case in Western societies, w
here decisions are generally
made by individual consumers.

Social conventions

These reflect the culture and have an influence on effective marketing practices in
the overseas country. Many of these are relate to eating, so these conventions
would be impor
tant to a food marketer. Culturally influenced social conventions
apply to the marketing of most consumer goods and services, but apply to a
lesser extent to the marketing of industrial products.

Cognitive styles

There are three areas of interest where co
gnitive style varies between cultures:



Loyalty:

In many Asian countries, consumers are loyal to brands. However
in Australia, consumers are less loyal and are more inclined to switch
brands.


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Customer involvement:
What is the nature and degree of customer
involvement in the purchase decision? In China, the overall level of