Case One: Japan to Apple’s iPhone: “No Thanks!”
The new version of Apple’s iPhone has generally been a strong seller worldwide, except in Japan. While some analysts had estimated that Apple would sell a million units of its latest iPhone in Japan, revised
estimates put the number at more like 500,000 phones. So what’s the problem? The phone uses the faster 3G network and offers a touch screen. And Apple iPods and computers are popular in Japan.
Well, it turns out that Apple iPhone’s use of the 3G network is not a big deal in Japan, because 3G access has been a standard feature on Japanese cell phones for several years. And as far as the touch screen
is concerned, some Japanese consumers feel that they would have problems getting used to it. Perhaps the biggest hurdle facing Apple, however, is what the iPhone doesn’t have. Remember, Japanese
consumers enjoy some of the world’s most technologically advanced cell phone features, such as “a high-end color display, digital TV-viewing capability, satellite navigation service, music player and digital
camera.” Another “must have” feature in Japan, lacking in the iPhone, is “emoji,” which is clip art that can be inserted into sentences to make e-mails more attractive. In addition, many mobile phones in Japan
allow their users to use their phones as debit cards or train passes.
Questions
1. Did Apple err in trying to sell its latest iPhone in Japan?
2. Is the Japanese cell phone market similar to the cell phone markets in other countries?
Source: Yukari Iwatani Kane, “Apple’s Latest iPhone Sees Slow Japan Sales,” Wall Street Journal, September 15, 2008, B3.
Case Two: Would Mickey Mouse Eat Shark’s Fin Soup?
Controversy started brewing at Hong Kong Disneyland even before the park opened in fall 2005. At Disney theme parks around the world, weddings and wedding receptions are a profitable business. Disney
is planning to offer shark’s fin soup as an option on wedding reception menus at Hong Kong Disneyland.
Clearly, Disney wants to show its appreciation for Chinese traditions, and claims that it is doing nothing more than following local standards—the dish is considered an essential part of a Chinese wedding
banquet, and can be priced at up to $150 at the best restaurants. However, environmental groups from all over the world are up in arms over the prospect of Disney serving this soup, which points out a
difference between Chinese and Western traditions.
Although shark’s fin soup has been a Chinese favorite for 200 years, some environmental groups are concerned that China’s increasing wealth has led to a greater appetite for rare species. For example, Hong
Kong authorities recently stopped a shipment of 1,800 freeze-dried penguins that were being smuggled into mainland China. Some animal advocates are afraid that down the road entire species could be
threatened.
Question
1. As a member of the top management team at the Walt Disney Company, do you keep or delete shark’s fin soup from the wedding banquet menu at Hong Kong Disneyland?
Source: Keith Bradsher, “Chinese Delicacy Has Disney in Turbulent Waters,” New York Times, June 17, 2005, C1, C7.
Cross-Cultural Consumer Behavior: An International Perspective
IN OUR EXAMINATION OF psychological, social, and cultural factors, we have regularly pointed out how segments of consumers from a particular country or culture are in certain ways different in terms of
their consumer attitudes and behavior. If such diversity exists among segments of a single society, then even more diversity is likely to exist among the members of two or more societies. To succeed,
international marketers must understand the nature and extent of differences between the consumers of different societies—“cross-cultural” differences—so that they can determine whether they can use a
similar marketing strategy across different countries, or develop somewhat different or even rather unique and differentiated marketing strategies for specific foreign markets.
Creating an effective strategy that works across different countries with different cultures is a real challenge.
Moreover, while it is sometimes possible to create a single strategy (i.e., a global strategy), in other cases it is better to create different strategies for different countries (i.e., local strategies). To get you to think
more about this challenge, Figure 13.1 presents an English language ad for the upscale Ritz-Carlton Golf Club & Spa®. While this ad was likely designed primarily for particularly affluent U.S. consumers, it is
nevertheless likely to appear in selected upscale magazines that are also read by a segment of very-affluent consumers from all over the world who frequently visit the United States and regularly read American
and other English language upscale magazines. As you read this chapter, you will continue to be challenged to think about when it is appropriate to market to consumers locally, and when a mixed or global
strategy may be best.
Figure 13.1
QUESTION: Under What Circumstances Would This English Language Ad Attract Affluent Consumers from Largely Non-English Speaking Countries?
Source: © 2005, DC Ranch L.L.C. The DC Ranch & Silverleaf names & related marks are registered trademarks. (www.silverleaf.com)
Learning Objectives
1. To Understand the Importance of Formulating an Appropriate Multinational or Global Marketing Strategy.
2. To Understand How to Study the Differences Among Cultures while Developing Marketing Strategies.
3. To Understand How Consumer-Related Factors Impact a Firm’s Decision to Select a Global, Local, or Mixed Marketing Strategy.
4. To Understand How Lifestyle and Psychographic Segmentation Can Be Used in Developing Global or Local Marketing Strategies.
Developing Multinational Marketing Strategies Is Imperative
Learning Objective 13.1
To Understand the Importance of Formulating an Appropriate Multinational or Global Marketing Strategy.
Today, almost all major corporations are actively marketing their products beyond their original homeland borders. In fact, the issue is generally not whether to market a brand in other countries but rather how
to do it (the same product with the same “global” advertising campaign, or “tailored” products and localized ads for each country). Because of this emphasis on operating as a multinational entity, the
vocabulary of marketing now includes terms such as glocal, which refers to companies that are both “global” and “local”; that is, they include in their marketing efforts a blend of standardized and local elements
in order to secure the benefits of each strategy.
This challenge has been given special meaning by the efforts of the European Union (EU) to form a single market. Although the movement of goods and services among its 27 members (as of January 1, 2007)
has been eased, it is unclear whether this diverse market will really be transformed into a single market of almost 495 million homogeneous “Euroconsumers” with the same or very similar wants and needs. 1
Many people hope that the introduction of the euro as a common EU currency will help shape Europe into a huge, powerful, unified market. Closer to home, the North American Free Trade Agreement
(NAFTA), which currently consists of the United States, Canada, and Mexico, provides free-market access to more than 440 million consumers. Since its inception (January 1, 1994), for example, the
markets in Canada and Mexico for packaged software from U.S. firms have grown to three times their pre-NAFTA market size, and all trade between the United States, Canada, and Mexico has increased
by 200 percent. 2 Other important trade associations include the Association of Southeast Asian Nations (ASEAN), consisting of Indonesia, Singapore, Thailand, the Philippines, Malaysia, Brunei; Mercosur
(the largest Latin American trade agreement), which includes Argentina, Bolivia, Brazil, Chile, Columbia, Ecuador, Paraguay, Peru, and Uruguay; and the Central America Trade Agreement (CAFTA), which
includes Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua.
Many firms are developing strategies to take advantage of these and other emerging economic opportunities. A substantial number of firms are now jockeying for market share in foreign markets. For instance,
Starbucks has been opening stores in China, and MTV Networks has formed a partnership with @Japan Media and running a 24-hour Japanese language music TV channel. 3
Firms are selling their products worldwide for a variety of reasons. First, with an ongoing buildup of “multinational fever” and the general attractiveness of multinational markets, products or services originating
in one country are increasingly being sought out by consumers in other parts of the world. Second, many firms have learned that overseas markets represent the single most important opportunity for their future
growth when their home markets reach maturity. This realization is propelling them to expand their horizons and seek consumers scattered all over the world. Moreover, consumers all over the world are eager
to try “foreign” products that are popular in different and far-off places. Consider the following story:
There was this Englishman who worked in the London office of a multinational corporation based in the United States. He drove home one evening in his Japanese car. His wife, who worked in a firm which
imported German kitchen equipment, was already home. Her small Italian car was often more maneuverable in London’s heavy traffic than most other cars. After a meal which included New Zealand lamb,
California carrots, Mexican honey, French cheese and Spanish wine, they settled down to watch a program on their television set, which has been made in Finland. The program was a retrospective celebration
of the war to recapture the Falkland Islands. As they watched it they felt warmly patriotic, and very proud to be British. 4
According to Business Week, Coca-Cola is the most valuable brand in the world, with a brand value of almost $67 billion. Table 13.1 presents a list of the world’s 10 best global brands.
Table 13.1 The Best Global Brands
RANK BRAND 2008 BRAND VALUE ($BILLIONS)
1 Coca-Cola 66.7
2 IBM 59.0
3 Microsoft 59.0
4 GE 53.1
5 Nokia 35.9
6 Toyota 34.1
7 Intel 31.3
8 McDonald’s 31.0
9 Disney 29.3
10 Google 25.6
Note: Only includes brands that obtain at least one-third of their earnings outside of their home country.
Source: Burt Helm, “Best Global Brands,” Business Week, September 29, 2008, 56.
Winning Emerging Markets
In 2006, for the first time, the GDP of emerging markets equaled the GDP of advanced nations. Much of this growth came from the “BRICET” nations—Brazil, Russia, India, China, Eastern Europe, and
Turkey. Because emerging markets are home to about 85 percent of the world’s population, multinational marketers who ignore these markets do so at their own peril. 5
Acquiring Exposure to Other Cultures
As more and more consumers come in contact with the material goods and lifestyles of people living in other parts of the world, they have the opportunity to adopt these different products and practices. How
consumers in one culture secure exposure to the goods of other people living in other cultures is an important part of consumer behavior. It impacts the well-being of consumers worldwide and of marketers
trying to gain acceptance for their products in countries that are often quite different from their home country. After all, by the time you read this, there may be a number of models of automobiles available for
you to purchase that were made in China, thanks to a deal between Chery Automobiles of China and Malcolm Bricklin, chairman of Visionary Vehicles. 6
Still further, a portion of consumers’ exposure to different cultures tends to come about through consumers’ own initiatives—their travel, their living and working in foreign countries, or even their immigration to
a different country. For example, “Turkish migrant workers to Germany and the Netherlands have introduced the ‘Doner Kebap,’ a Turkish sandwich of roasted meat, and ‘pide,’ Turkish flat bread, into those
countries.” 7 Additionally, consumers obtain a “taste” of different cultures from contact with foreign movies, theater, art and artifacts, and most certainly, from exposure to unfamiliar and different products. This
second major category of cultural exposure is often fostered by marketers seeking to expand their markets by bringing new products, services, practices, ideas, and experiences to potential consumers residing
in a different country and possessing a different cultural view. Within this context, international marketing provides a form of “culture transfer.”
Country-of-Origin Effects
A number of recent research studies have examined country-of-origin effects both in the United States and in other countries. One study of the Samsung brand among U.S. consumers found no difference in
brand image or purchase intention whether the subject thought that Samsung was a Japanese brand or a South Korean brand. 8 A study in Indonesia reported that with respect to relative quality and purchase
intention, country-of-origin was more important than price for both intangible services and tangible goods, and this was true for consumers both high and low in consumer ethnocentrism (e.g., whether and how
strongly consumers prefer products made in their own country, compared to other countries). 9 Using visitors to an automobile show as subjects, research conducted in Australia found that consumers
exhibiting high levels of NFC (need for cognition—see Chapter 5) were “more engaged in more complex assessment of the country of origin (COO) cue in their product evaluation than those who have less
NFC.” 10 Still further, research studying COO in Turkey found that while products from Germany, France, Italy, and Israel were favored by Turkish consumers for their quality, design, and performance,
products from the United States and England were chosen for their reliability and warranty. And although Chinese and South Korean products were rated highly with respect to price and innovativeness,
Turkish consumers felt they were lacking in quality, performance, durability, and assortment. 11
When consumers are making purchase decisions, they may take into consideration the COO of their choices. Researchers have shown that consumers use their knowledge of where products are made in the
evaluation of their purchase options. 12 Such a country-of-origin effect seems to come about because consumers are often aware that a particular firm or brand name is associated with a particular country. For
example, Volkswagen’s current ad campaign features a vintage black VW Beetle that speaks English with a German accent in part to remind us of its German heritage. In contrast, Jaguar does not tend to play
on its British heritage when marketing its cars in the United States. And then there’s Chevrolet, the General Motors division responsible for over half of GM’s vehicle sales. Over the years, Chevrolet has used
slogans such as “See the U.S.A. in your Chevrolet,” and most recently used the theme “An American Revolution.”
Because of the sheer size of the Chinese consumer market and the recent growth in its spending power, a number of new studies have examined COO and the Chinese consumer. While the traditional view has
been that Chinese consumers strongly prefer foreign brands, more recent evidence suggests that this may not be the case, as sales of local brands across many product categories have risen. However, one
study found that while Chinese consumers say that they prefer buying local Chinese grocery brands, and that it is important to purchase local brands, actual purchase behavior often does not reflect this. 13 Still
further, other research conducted in China found that the effect of COO can influence four different factors: (1) consumer ethnocentrism, (2) knowledge of the product and country of origin, (3) degree of a
consumer’s involvement in the product, and (4) individual differences in information processing. The researchers also found that the COO was more influential for consumers with low multicultural competence
when making product quality evaluations than was true for consumers with greater multicultural competence. 14
In general, many consumers associate France with wine, fashion clothing, perfume, and other beauty products; Italy with pasta, designer clothing, furniture, shoes, and sports cars; Japan with cameras and
consumer electronics; and Germany with cars, tools, and machinery. Moreover, consumers tend to have an established attitude or even a preference when it comes to a particular product being made in a
particular country. This attitude might be positive, negative, or neutral, depending on perceptions or experience. For instance, a consumer in one country might positively value a particular product made in
another country (e.g., affluent American consumers may feel that an English Thomas Pink dress shirt or a Bosch dishwasher from Germany are worthwhile investments). In contrast, another consumer might be
negatively influenced when he learns that a television set he is considering is made in a country that he does not associate with fine electronics (e.g., a TV made in Costa Rica). Such COO effects influence how
consumers rate quality and which brands they will ultimately select.
Refining the COO concept, a study that contrasted U.S. and Mexican consumers decomposed COO into three separate entities: country of design (COD), country of assembly (COA), and country of parts
(COP). Of the three, COP had the strongest influence on product evaluations. 15 The study also found that COD was a more important cue in the United States than in Mexico, and that younger Mexicans
exhibited a stronger COO effect than older Mexicans. In a similar vein, a study in Tunisia, an emerging market, investigated the effects of COD, country of manufacture (COM), and brand image on
consumers’ perceptions of products that were designed and manufactured in different countries. The research found that in an emerging market, consumers place greater value in a product’s COM than in its
COD (i.e., COM is more influential in a consumer’s perception of product quality). This is true, unless it is believed that the product is complex to design and manufacture. 16 Figure 13.2 presents a conceptual
model of COD and COM impact on the perception of branded products. Note how the impact of COD and COM on perceived product quality includes the “fit,” in the consumer’s mind, of the perceived
ability of the country to manufacture (or design) a product in that product category. 17
Figure 13.2 Conceptual Model of COD and COM on the Branded Product
Source: Adapted from: Leila Hamzaoui Essoussi and Dwight Merunka, “Consumers’ Product Evaluations in Emerging Markets,”International Marketing Review, 24, no. 4 (2007): 413.
Animosity and Country of Manufacturer
Beyond perceptions of a product’s attributes based on its COM, research evidence suggests that some consumers may refrain from purchasing products from particular countries due to animosity. A study of
this issue found that high-animosity consumers in the People’s Republic of China owned fewer Japanese products than low-animosity consumers (during World War II, Japan occupied parts of China).
Although some Chinese consumers might consider Sony to be a high-end, high-quality brand (or perceptions of the product itself might be very positive), they might nevertheless refuse to bring a product
manufactured in Japan into their homes. Similarly, some Jewish consumers avoid purchasing German-made products due to the Holocaust, and some New Zealand and Australian consumers boycott French
products due to France’s nuclear tests in the South Pacific. 18
Cross-Cultural Consumer Analysis
Learning Objective 13.2
To Understand How to Study the Differences Among Cultures While Developing Marketing Strategies.
To determine whether and how to enter a foreign market, marketers need to conduct some form of cross-cultural consumer analysis. Within the scope of this discussion, cross-cultural consumer analysis is
defined as the effort to determine to what extent the consumers of two or more nations are similar or different. Such analyses can provide marketers with an understanding of the psychological, social, and
cultural characteristics of the foreign consumers they wish to target, so that they can design effective marketing strategies for the specific national markets involved.
In a broader context, cross-cultural consumer analysis might also include a comparison of subcultural groups (see Chapter 12) within a single country (such as English and French Canadians, Cuban Americans
and Mexican Americans in the United States, or Protestants and Catholics in Northern Ireland). For our purposes, however, we will limit our discussion of cross-cultural consumer analysis to comparisons of
consumers of different countries.
Similarities and Differences Among People
A major objective of cross-cultural consumer analysis is to determine how consumers in two or more societies are similar and how they are different. For instance, Table 13.2 presents at least a partial
depiction of the differences between Chinese and American cultural traits (note, for example, the last bulleted point in each column). Countries like China and Mexico are collectivistic (“we”) cultures, while the
United States and the United Kingdom are individualistic (“I”) cultures. A study of “I” versus “we” consumers in Montreal, Canada, found that collectivists rely more on word of mouth, preferring information
from trusted, familiar sources when forming their service expectations (the service examined in the study was airline travel). Individualists, on the other hand, rely on unambiguous verbal or written
communication, and attach more importance to explicit and implicit promises and third parties. 19Another research effort, this time studying Australia (an individualist nation) and Singapore (a collectivist
country), found that Singaporean consumers were more responsive to social influence in a hypothetical buying situation than Australian consumers. Moreover, Australian subjects were more internally oriented,
while Singaporean subjects were more externally oriented. This resulted in Australians attributing more responsibility to themselves for the good or bad outcome of a buying decision. 20
Table 13.2 A Comparison of Chinese and American Cultures
CHINESE CULTURAL TRAITS AMERICAN CULTURAL TRAITS
• Centered on a set of relationships defined by Confucian doctrine
• Submissive to authority
• Ancestor worship
• Passive acceptance of fate by seeking harmony with nature
• Emphasizes inner experiences of meaning and feeling
• A closed worldview, prizing stability and harmony
• Culture rests on kinship ties and tradition with a historical orientation
• Places weight on vertical interpersonal relationships
• Values a person’s duties to family, clan, and state
• Centered on the individual
• Greater emphasis on self-reliance
• Resents class-based distinctions
• Active mastery in the person–nature relationship
• Concerned with external experiences and and the world of things
• An open view of the world, emphasizing change and movement
• Places primary faith in rationalism and is oriented toward the future
• Places weight on horizontal dimensions of interpersonal relationship
• Values the individual personality
Source: Copyright © 2001 by American Academy of Advertising, from Carolyn A. Lin, “Cultural Values Reflected in Chinese and American Television Advertising,” Journal of Advertising, vol. 30, no. 3
(Winter 2001): Used with permission of M.E. Sharpe, Inc. All Rights Reserved. Not for reproduction.
Such an understanding of the similarities and differences that exist between nations is critical to the multinational marketer who must devise appropriate strategies to reach consumers in specific foreign markets.
The greater the similarity between nations, the more feasible it is to use relatively similar marketing strategies in each nation. On the other hand, if the cultural beliefs, values, and customs of specific target
countries are found to differ widely, then a highly individualized marketing strategy is indicated for each country. For example, a recent study of Internet banking among Swedish and Estonian customers found
that while Swedish customers were demographically heterogeneous, Estonian customers could be segmented by age, gender, education, and income.21
As another illustration, in addition to IKEA furniture company’s generic global Web site that uses English, the firm also offers 14 localized Web sites (in selected languages) and 30 mini-sites (in more languages)
that only provide contact information. And whereas the IKEA Italian Web site shows a group of people frolicking on their IKEA furniture (nudity is acceptable and commonplace in Italian advertising), the
Saudi Arabian Web site uses extremely conservative photographs (www.ikea.com). 22
A recent study in four Central European nations (Croatia, The Czech Republic, Hungary, and Poland) found that although these nations are in the same geographic region, national differences would make it
unwise to employ the same advertising content and imagery in all four countries. 23 As another example, while 88 percent of adults in both France and Germany drink mineral water, it appears that French
consumption is strongly associated with concern for the quality of tap water, whereas German consumption is closely linked to vegetarians. 24 However, in contrast to the results presented previously, a recent
study examined the notion of an Asian regional brand, and found that some marketers have been able to create a “multicultural mosaic” for their brand that can “appeal across national boundaries” (e.g.,
Singapore-based Tiger Beer and the 77th Street retail brand). They have done this by creating the image of an Asian consumer that is “urban, modern, and multicultural.” 25
A firm’s success in marketing a product or service in a number of foreign countries is likely to be influenced by how similar the beliefs, values, and customs are that govern the use of the product in the various
countries. For example, the worldwide TV commercials and magazine ads of major international airlines (American Airlines, British Airways, Continental Airlines, Air France, Lufthansa, Qantas, Swissair,
United Airlines) tend to depict the luxury and pampering offered to their business-class and first-class international travelers. The reason for their general cross-cultural appeal is that these commercials speak to
the same types of individual worldwide—upscale international business travelers—who share much in common (Figure 13.3). In contrast, knowing that “typical” American advertising would not work in China,
Nike hired Chinese-speaking art directors and copywriters to develop specific commercials that would appeal to the Chinese consumer within the boundaries of the Chinese culture. The resulting advertising
campaign appealed to national pride in China. 26 Yet another example of cultural differences necessitating a change in marketing would be the efforts of Western banks to attract Muslim customers. The
Shari’ah (the sacred law of Islam based on what is written in the Koran) forbids Muslims from charging interest, and prohibits such Western-type financial transactions such as speculation, selling short, and
conventional debt financing. Consequently, Western banks in the United Kingdom that want to appeal to that country’s 2 million Muslim residents must develop a new range of products for this group of target
consumers. 27
Figure 13.3
QUESTION: Why Do Most Global Airlines Stress Pampering Business Travelers in Their Ads?
Source: Courtesy of Qantas.
A recent study in four countries (United States, United Kingdom, France, and Germany) examined whether there were differences in terms of “consumer style” (i.e., how a consumer approaches the purchase
and consumption experience, including attitudes, beliefs, and consumers’ decision rules about price, value, etc.). 28 Table 13.3 presents some of the consumer style differences among subject participants from
the four countries. Also, based on consumer style, the researchers were able to segment these consumers into four clusters: (1) price-sensitive consumers, (2) variety-seeking consumers, (3) brand-loyal
consumers, and (4) information-seeking consumers. Since German consumers, for example, tend to be less brand-loyal and more price-sensitive than their counterparts from the other three nations in the study,
it is not surprising that German participants are underrepresented in the brand-loyal consumer cluster and overrepresented in the price-sensitive cluster. Table 13.4 contains a distribution of consumer clusters
by country.
Table 13.3 Differences in “Consumer Style” Among Consumers from Four Nations
• German Consumers:
? Less brand loyal
? More price-sensitive
? Least likely to seek variety in products
? Most likely to consider themselves impulsive shoppers
? Least likely to say they dislike shopping
U.S. Consumers
? More likely to seek new and different products than French and German consumers
? See advertising as more informative than French and German consumers
United Kingdom Consumers
? More likely to seek new and different products than French and German consumers
? See advertising as more informative than French and German consumers
? See advertising as insulting
French Consumers
? Believe shopping is no fun
? Claim to engage in comparison shopping, but are not the most likely to purchase products on sale
Source: John A. McCarty, Martin I. Horn, Mary Kate Szenasy, and Jocelyn Feintuch, “An Exploratory Study of Consumer Style: Country Differences and International Segments,” Journal of Consumer
Behaviour (January–February 2007): 53–54. Copyright © 2007 John Wiley & Sons, Ltd.
Table 13.4 Distribution of Consumer Clusters (Segments) by Country
CLUSTER FRANCE GERMANY UNITED KINGDOM UNITED STATES
Price-Sensitive Consumers 27.5 38.7 19.3 21.0
Variety-Seeking Consumers 22.0 19.4 22.4 23.3
Brand-Loyal Consumers 30.4 20.0 36.2 22.2
Information-Seeking Consumers 20.1 21.9 22.1 33.5
Source: John A. McCarty, Martin I. Horn, Mary Kate Szenasy, and Jocelyn Feintuch, “An Exploratory Study of Consumer Style: Country Differences and International Segments,” Journal of Consumer
Behaviour (January–February 2007): 56. Copyright © 2007 John Wiley & Sons, Ltd.
Further supporting the importance of cultural differences or orientation, consider that Southeast Asia is frequently the largest market for prestige and luxury brands from the West, and that luxury brand
companies such as Louis Vuitton, Rolex, Gucci, and Prada are looking to markets such as Hanoi and Guangzhou when they are thinking of expanding their market reach. Indeed, in fine-tuning their marketing,
these luxury-brand marketers need to be especially responsive to cultural differences that compel luxury purchases in the Asian and Western markets. To this end, research suggests that while Western
consumers tend to “use” a prestige item to enhance their sense of individualism or serve as a source of personal pleasure, for Southeast Asian consumers, the same prestige item might serve to further bond the
individual with others and to provide visible evidence of the person’s value to others. 29 Still further, within the scope of a visible luxury product, a woman in Hong Kong might carry a Fendi handbag (a visible
and conspicuous item), but is not likely to be receptive to luxury lingerie because it is not an item that “shows” in public. 30 A recent study of international tourism in Hawaii found that Japanese tourists primarily
travel to Hawaii for the shopping, especially for leather handbags and accessories. 31
The Growing Global Middle Class
Recent projections state that while the world’s population will grow by about 1 billion people over the next 12 years, the middle class will increase by 1.8 billion people, of which 600 million will be in China.
Moreover, by 2020, the middle class will grow from 30 percent to 52 percent of the world’s population. And by 2025, China will have the world’s largest middle class, and India’s middle class will be 10 times
larger than it currently is. 32 The growing middle class in developing countries is a phenomenon that is very attractive to global marketers who are often eager to identify new customers for their products. The
news media has given considerable coverage to the idea that the rapidly expanding middle class in countries of Asia, South America, and Eastern Europe is based on the reality that, although per capita income
may be low, there is nevertheless considerable buying power in a country such as China, where most income is largely discretionary income. Today, top wage earners in Beijing earn about $12,000 annually,
while the middle class averages about $7,000 a year. While this may not be a high income by Western standards, in a low-cost market it represents an impressive amount of buying power. 33 Indeed, this same
general pattern of the growing middle class has also been observed in many parts of South America, Asia, and Eastern Europe. 34 In many parts of the world, an income equivalent to $5,000 is considered the
point at which a person becomes “middle class,” and it has been estimated that more than 1 billion people in the world’s developing countries meet this income standard. 35 It is important to note though, that
consumers in less-developed nations often cannot afford to pay as much for a product as consumers in the more advanced economies do. As an example, Nestlé has introduced low-price ice cream in China
—the product sells for 12 cents. 36 Table 13.5 lists the size of the emerging middle class in 12 different countries. The results reveal that more than 90 percent of the population of South Korea can be
considered middle class, whereas less than 5 percent of the populations of Nigeria and Pakistan can be similarly categorized.
Table 13.5 Size of the Emerging Middle Class in Selected Countries
PERCENT OF THE POPULATION NUMBER OF PEOPLE (MILLIONS)
Brazil 35 57.9
China 23 290.4
India 9 91.4
Indonesia 10 21.0
Korea, Republic of 93 44.0
Malaysia 46 10.7
Mexico 46 45.1
Nigeria <5 <6.3
Pakistan <5 <6.9
Peru 27 6.9
Philippines 25 18.9
Russian Federation 45 65.5
Source: Benjamin Senauer and Linda Goetz, “The Growing Middle Class in Developing Countries and the Market for High-Value Food Products,” Prepared for the Workshop on Global Markets for High-
Value Food, Economic Research Service, USDA, Washington, D.C., February 14, 2003, 13, accessed at www.farmfoundation.org/documents/ben-sanauerpaper2—10—3-13-03_000.pdf.
The rather rapid expansion of middle-class consumers, over the past 50 years, have attracted the attention of many well-established marketing powerhouses, who were already finding their home markets to be
rather mature and reaching what was felt to be a saturation point in terms of sales opportunities. While in 1960 two-thirds of the world’s middle class lived in industrialized nations, by the year 2000, some 83
percent of middle-class citizens were living in developing countries. These changes strongly suggest that more people are now living longer, healthier, and better lives—literacy rates in developing countries have
risen dramatically in the past 50 years, and today two-thirds, rather than only one-third, of the people living in these nations are literate.37 Table 13.6 captures the global progress over the past 50 years and
projects it to year 2050. Note how in 1950 the caloric intake in emerging markets was only 55 percent of industrial countries, while today it is more than 80 percent.
Table 13.6 Measured Global Progress 1950–2050
1950 2000 2050
Global Output, Per Capita ($) 586 6,666 15,155
Global Financial Market Capitalization, Per Capita ($) 158 13,333 75,000
Percent of Global GDP
Emerging Markets 5 50 55
Industrial Countries 95 75 45
Life Expectancy (years)
Emerging Markets 41 64 76
Industrial Countries 65 77 82
Daily Caloric Intake
Emerging Markets 1,200 2,600 3,000
Industrial Countries 2,200 3,100 3,200
Infant Mortality (per 1,000)
Emerging Markets 140 65 10
Industrial Countries 30 8 4
Literacy Rate (per 100)
Emerging Markets 33 64 90
Industrial Countries 95 98 99
Source: Bloomberg, World Bank, United Nations, and author’s estimates. Output and financial market capitalization figures are inflation-adjusted. Peter Marber, “Globalization and Its Contents,” World Policy
Journal (Winter 2004–05): 30.
Although a growing middle class provides a market opportunity for products like Big Macs and fries, it should always be remembered that the same product may have different meanings in different countries.
For example, whereas a U.S. consumer wants his or her “fast food” to be fast, a Korean consumer is more likely to view a meal as a social or family-related experience. Consequently, convenient store hours
may be valued more by a Korean consumer than shorter service time. 38 In China, despite a traditional emphasis on “fresh” (just picked or killed) food, the emerging middle class consumers, with rising
incomes and rising demands on their time, are often willing to spend money to save time, in the form of alternatives to home-cooked meals. 39
The Global Teen Market
As part of growth of the world middle class, there has been a parallel growth in an affluent global teenage and young adult market, a segment which has attracted the attention of marketers. Overall, teenagers
(and their somewhat older brothers and sisters—“the young adult segment”) appear to have quite similar interests, desires, and consumption behavior no matter where they live. Therefore, in response to this
perspective, consumer researchers have explored the makeup, composition, and behavior of this segment(s). One particular study considered the fashion consciousness of teenagers in the United States, Japan,
and China. 40 The research revealed that American and Japanese teens were highly similar, differing only in that the Japanese teens were more likely than American teens to choose style over comfort (most
likely because of the importance, in the Japanese Confucian society, of meeting the expectations of group members). In contrast, Chinese teens were less fashion conscious than both the American and
Japanese teens, which supports the idea that differences exist between highly developed and less high-developed nations with respect to teen fashion consciousness. 41
Advertising agency BBDO’s (Chicago) recent “GenWorld Global Teen Study” reported a significant change in the world’s teenagers. 42 During the 1990s, according to the research, the “coolest” teens were
found in the United States. Currently, though, the “coolest” teens, the Creatives, can be found in all of the 13 countries examined in the research. The Creatives represent about 30 percent of all teenagers, and
are especially numerous in Western Europe (only 23 percent of U.S. teens are Creatives). Table 13.7 presents the top values and bottom values of both Creatives and all teenagers. Notice, for example, that
while 13 percent of all teens value traditional gender roles, only 1 percent of Creatives do. 43 Still further, for the 13 nations examined in the GenWorld Global Teen Study, Figure 13.4 indicates the percentage
of teenagers in each country who do two or more of the following every day—talk on a cell phone, text message, go online, e-mail, IM, and/or use a search engine. As shown, while 85 percent of French and
UK teens meet the criteria, only 23 percent of Brazilian teens and 5 percent of teens in India do so. 44
Table 13.7 Teenage Creatives Versus All Teens: Top Values and Bottom Values
CREATIVES’ TOP VALUES CREATIVES’ BOTTOM VALUES
ALL TEENS CREATIVES ALL TEENS CREATIVES
Freedom 55% 66% Public Image 30% 17%
Honesty 49% 61% Status 22% 12%
Equality 39% 50% Wealth 23% 11%
Learning 37% 47% Looking Good 25% 9%
Preserving the Environment 31% 45% Traditional Gender Roles 13% 1%
Curiosity 34% 40% Faith 19% 2%
Creativity 29% 36%
Source: Becky Ebenkamp, “Creative Consciousness,” Brandweek, January 16, 2006, 14.
Figure 13.4 Percent of Teens Who Do Two or More of the Following Every Day
Source: Energy BBDO, “The GenWorld Teen Study,” 17, accessed atwww.businessfordiplomaticaction.com/learn/articles/genworld_leave_behind.pdf.
Acculturation Is a Needed Marketing Viewpoint
Too many marketers contemplating international expansion make the strategic error of believing that if its product is liked by local or domestic consumers, then everyone will like it. This biased viewpoint
increases the likelihood of marketing failures abroad. It reflects a lack of appreciation of the unique psychological, social, cultural, and environmental characteristics of distinctly different cultures. To overcome
such a narrow and culturally myopic view, marketers must also go through an acculturation process. They must learn everything that is relevant about the usage or potential usage of their products and product
categories in the foreign countries in which they plan to operate. Take the Chinese culture, for example. For Western marketers to succeed in China, it is important for them to take into consideration guo qing
(pronounced “gwor ching”), which means “to consider the special situation or character of China.” 45 An example of guo qing for Western marketers is the Chinese policy of limiting families to one child. An
appreciation of this policy means that foreign businesses will understand that Chinese families are open to particularly high-quality baby products for their single child (or “the little emperor”). 46 One result of
this one-child policy is that, in the large cities in China, children are given more than $3 billion a year by their parents to spend as they wish and influence approximately 68 percent of their parents’ spending.
These Chinese children are also less culture bound than their parents and are, therefore, more open to Western ideas and products. 47
In a sense, cross-cultural acculturation is a dual process for marketers. First, marketers must thoroughly orient themselves to the values, beliefs, and customs of the new society to appropriately position and
market their products (being sensitive to and consistent with traditional or prevailing attitudes and values). Second, to gain acceptance for a culturally new product in a foreign society, they must develop a
strategy that encourages members of that society to modify or even break with their own traditions (to change their attitudes and possibly alter their behavior). To illustrate the point, a social marketing effort
designed to encourage consumers in developing nations to secure polio vaccinations for their children would require a two-step acculturation process. First, the marketer must obtain an in-depth picture of a
society’s present attitudes and customs with regard to preventive medicine and related concepts. Then the marketer must devise promotional strategies that will convince the members of a target market to have
their children vaccinated, even if doing so requires a change in current attitudes.
Distinctive Characteristics of Cross-Cultural Analysis
It is often difficult for a company planning to do business in foreign countries to undertake cross-cultural consumer research. For instance, it is difficult in the Islamic countries of the Middle East to conduct
Western-style market research. In Saudi Arabia, for instance, it is illegal to stop people on the streets, and focus groups are impractical because most gatherings of four or more people (with the exception of
family and religious gatherings) are outlawed. 48 American firms desiring to do business in Russia have found a limited amount of information regarding consumer and market statistics. Similarly, marketing
research information on China is generally inadequate, and surveys that ask personal questions arouse suspicion. So marketers have tried other ways to elicit the data they need. For example, Grey Advertising
has given cameras to Chinese children so they can take pictures of what they like and do not like, rather than ask them to explain it to a stranger. Moreover, ACNielsen conducts focus groups in pubs and
children’s playrooms rather than in conference rooms; and Leo Burnett has sent researchers to China to simply “hang out” with consumers. 49
Applying Research Techniques
Although the same basic research techniques used to study domestic consumers are useful in studying consumers in foreign lands (see Chapter 2), in cross-cultural analysis an additional burden exists because
language and word usage often differ from nation to nation. Another issue in international marketing research concerns scales of measurement. In the United States, a 5- or 7-point scale may be adequate, but
in other countries a 10- or even 20-point scale may be needed. Still further, research facilities, such as telephone interviewing services, may or may not be available in particular countries or areas of the world.
To avoid such research measurement problems, consumer researchers must familiarize themselves with the availability of research services in the countries they are evaluating as potential markets and must learn
how to design marketing research studies that will yield useful data. Researchers must also keep in mind that cultural differences may make “standard” research methodologies inappropriate. Table 13.8
identifies basic issues that multinational marketers must consider when planning cross-cultural consumer research.
Table 13.8 Research Issues in Cross-Cultural Analysis
FACTORS EXAMPLES
Differences in language and meaning Words or concepts (e.g., “personal checking account”) may not mean the same in two different countries.
Differences in market segmentation opportunities The income, social class, age, and sex of target customers may differ dramatically between two different countries.
Differences in consumption patterns Two countries may differ substantially in the level of consumption or use of products or services (e.g., mail catalogs).
Differences in the perceived benefits of products and services Two nations may use or consume the same product (e.g., yogurt) in very different ways.
Differences in the criteria for evaluating products and services The benefits sought from a service (e.g., bank cards) may differ from country to country.
Differences in economic and social conditions and family structure The “style” of family decision making may vary significantly from country to country.
Differences in marketing research and conditions The types and quality of retail outlets and direct-mail lists may vary greatly among countries.
Differences in marketing research possibilities The availability of professional consumer researchers may vary considerably from country to country.
Alternative Multinational Strategies: Global Versus Local
Learning Objective 13.3
To Understand How Consumer-Related Factors Impact a Firm’s Decision to Select a Global, Local, or Mixed Marketing Strategy.
Some marketers have argued that world markets are becoming more and more similar and that standardized marketing strategies are, therefore, becoming more feasible. For example, Exxon Mobil had
sponsored a $150 million marketing campaign to promote its brands (Exxon, Esso, Mobil, and General), and the firm wanted all the ads to carry the same look and feel, regardless of which one of the 100
countries in the world the ad will appear. 50 In contrast, other marketers feel that differences between consumers of various nations are far too great to permit a standardized marketing strategy. In a practical
sense, a basic challenge for many executives contemplating multinational marketing is to decide whether to use shared needs and values as a segmentation strategy (i.e., to appeal to consumers in different
countries in terms of their “common” needs, values, and goals) or to use national bordersas a segmentation strategy (i.e., to use relatively different, “local,” or specific marketing strategies for members of
distinctive cultures or countries).
Favoring a World Brand
An increasing number of firms have created world brand products that are manufactured, packaged, and positioned in exactly the same way regardless of the country in which they are sold. It is quite natural
for a “world class” upscale brand of wristwatches such as Patek Philippe to create a global or uniform advertising campaign to reach its sophisticated worldwide target market (see Figure 13.5). Although the
advertising copy is in specific target languages, one might speculate that many of Patek Philippe’s affluent target customers do read and write English. Nevertheless, to maximize their “comfort zone,” it is
appropriate to speak to them in their native languages.
Figure 13.5
QUESTION: Why Does One of the World’s Most Highly Regarded Wristwatch Brands Use a Single Global Advertising Strategy (Only Varying the Language)?
Source: © Patek Philippe Geneva. Used with pernmission. All rights reserved.
Marketers of products with a wide or almost mass-market appeal have also embraced a world branding strategy. For instance, multinational companies, such as General Motors, Gillette, Estée Lauder,
Unilever, and Fiat, have each moved from a local strategy of nation-by-nation advertising to a global advertising strategy.
Still other marketers selectively use a world branding strategy. For example, you might think that P&G, which markets hundreds of brands worldwide, is a company with an abundance of world brands.
Recently, though, it was revealed that of its 16 largest brands, only three are truly global brands—Always/Whisper, Pringles, and Pantene. Some of P&G’s other brands, such as Pampers, Tide/Ariel,
Safeguard, and Oil of Olay, are just starting to establish common positioning in the world market. 51
A recent study explored two global-look strategies in Taiwanese advertising—the use of Western models and English brand names. 52 A content analysis of almost 2,500 ads found that Western models
promoted products in slightly less than half of the ads, while English brand names were found in slightly more than half of the ads. These two strategies, it was reported, enhance the global perception of the
brand and enhance the perception that the product comes from a developed Western nation. Interestingly, while the use of Western models tended to increase the consumer’s perceived quality of the product,
these same consumers rated products with Chinese brand names (as opposed to English brand names) higher on brand friendliness, brand trust, self-brand connections, and brand liking. Another recent study
examined perceptions of “Western products” among Generation Y consumers in Kazakhstan, a transitional economy. The study found that because of increased contacts with the West, primarily through TV
but also through the marketing campaigns of multinational companies, these consumers had a favorable attitude toward Western products and things, especially for global brands. 53
As a possible further indication of the proliferation of world brands can be found in a recent study of global versus local online branding. 54 The research examined the online presence of 489 of the Fortune
Global 500 companies, and found that more than 55 percent of non-U.S. companies employed a global “.com” domain rather than a local (e.g., “.com.jp” for a Japanese firm) domain. While all four Brazilian
companies kept a local identity, as did most Japanese firms (86 percent), only 33 percent of Australian companies, 19 percent of French companies, and 18 percent of British companies used a local domain
name.
It has been suggested that one reason why global brands often do not survive is due to tribal differences, similar to those occurring on the TV series Survivor. Certainly, while differences in language and cultural
mores must be considered, the following five ideas may help in establishing a global brand: (1) begin by bringing together representatives from all key markets and disciplines—involve them early and often; (2)
conduct marketing research in all key markets; (3) create a foundation for the brand based on what global communities share, not on their differences, and then permit local markets to adapt the strategy to
meet local conditions; (4) use inputs from all countries to develop creative concepts; and (5) talk over all country-specific issues to find commonalities. 55 Still further, an exploratory study considers how
products, images, and activities associated with a popular culture, in this case the Japanese culture, support and sustain the brands associated with that culture (i.e., global Japanese brands). The study found
that the main components of Japanese culture can be used to determine the level of interest for these global brands in countries other than Japan. Figure 13.6 presents a model of cross-border diffusion of
popular culture. Cross-border diffusion levels are strongly linked to the extent of promotion and distribution in other countries, as well as access and interaction of consumers of the countries involved. 56
Figure 13.6 Cross-Border Diffusion of Popular Culture
Source: Roblyn Simeon, “A Conceptual Model Linking Brand Building Strategies and Japanese Popular Culture,” Marketing Intelligence & Planning, 24, no. 5 (2006): 466.
Are Global Brands Different?
According to a 12-nation consumer research project, global brands are viewed differently than local brands, and consumers, worldwide, associate global brands with three characteristics: quality signal, global
myth, and social responsibility. First, consumers believe that the more people who purchase a brand, the higher the brand’s quality (which often results in a global brand being able to command a premium
price). Still further, consumers worldwide believe that global brands develop new products and breakthrough technologies at a faster pace than local brands. The second characteristic, global myth, refers to
the fact that consumers view global brands as a kind of “cultural ideal,” and their purchase and use makes the consumer feel like a citizen of the world, and gives them an identity (i.e., “Local brands show what
we are; global brands show what we want to be”). Finally, global companies are held to a higher level of corporate social responsibility than local brands, and are expected to respond to social problems
associated with what they sell. For the 12 nations studied in this research, the importance of these three dimensions was consistent, and accounted for 64 percent of the variation in the overall brand
preferences (quality signal accounts for 44 percent of the explanation, global myth accounts for 12 percent of the explanation, and social responsibility accounts for 8 percent of the explanation). 57
Additionally, while there was not much variation across the 12 nations studied, there were intracountry differences, which resulted in the conclusion that there were four major segments in each country with
respect to how its citizens view global brands. Global Citizens (55 percent of the total respondents) use a company’s global success as an indication of product quality and innovativeness, and are also
concerned that the firm acts in a socially responsible manner. Global Dreamers (23 percent of the total respondents) view global brands as quality products, and are not particularly concerned about the social
responsibility issue.Antiglobals (13 percent of the total respondents) feel that global brands are higher quality than local brands, but they dislike brands that preach U.S. values and do not trust global companies
to act responsibly. Generally, they try to avoid purchasing global brands. Lastly, Global Agnostics (8%) evaluate global brands in the same way they evaluate local brands. 58
Multinational Reactions to Brand Extensions
Just because a brand may be global in character does not mean that consumers around the world will necessarily respond similarly to a brand extension. A recent study examined reactions to brand extensions
among Western culture (U.S.) and Eastern culture (India) consumers, hypothesizing that the Eastern holistic way of thinking (which focuses on the relationships between objects), rather than the Western
analytic style of thinking (which focuses on the attributes or parts of objects) would affect the manner in which consumers judge the “fit” of a brand extension. Indeed, the research results confirmed this
hypothesis—low-fit extensions (McDonald’s chocolate bar and Coke popcorn) received more positive evaluations from the Eastern culture subjects, while moderate-fit extensions (Kodak greeting cards and
Mercedes Benz watches) garnered equal responses from both cultural groups. For the Eastern culture participants, liking Coke products, and the fact that Coke and popcorn were complementary products, in
that they can be consumed together, was enough to make the brand extension acceptable. The American subjects, in contrast, saw little product class similarity between Coke and popcorn. 59 More recently,
these same researchers replicated their earlier study, went on to determine that American Indians were significantly more holistic in their thinking than Caucasian Americans, and reported that certain factors,
such as corporate reputation, may be used more frequently by Easterners (than by Westerners) as a basis for judging the “fit” of a brand extension. 60
Adaptive Global Marketing
In contrast to the marketing communication strategy that stresses a common message, some firms embrace a strategy that adapts their advertising messages to the specific values of particular cultures.
McDonald’s is an example of a firm that tries to localize its advertising and other marketing communications to consumers in each of the cultural markets in which it operates, making it a glocal company. For
example, the Ronald McDonald that we all know has been renamed Donald McDonald in Japan, because the Japanese language does not contain the R sound. Additionally, the McDonald’s menu in Japan has
been localized to include corn soup and green tea milkshakes. 61 And in Sweden McDonald’s developed a new package using wood-cut illustrations and a softer design to appeal to the interest the consumers
of that nation have in food value and the outdoors. 62
Like McDonald’s, Levi’s and Reebok also tend to follow multilocal strategies that calculate cultural differences in creating brand images for their products. For instance, Levi’s tends to position its jeans to
American consumers, stressing a social-group image, whereas it uses a much more individualistic, sexual image when communicating with European consumers. 63 Still further, Yahoo!, one of the most
successful Web sites on the Internet, modifies both its content and communications for each of its 23 country-specific Web sites. Moreover, in a number of Coke’s 140-plus markets, what we know as Diet
Coke is called Coca-Cola Light, because the word diet has an undesirable connotation or no relevance. 64 Similarly, Coke’s best-selling beverage in Japan is not Coke Classic—it’s Georgia Coffee—
packaged in a can and available in more than 10 versions (e.g., black, black with sugar, with milk and sugar, and so on). Other marketers, too, feel that the world brand concept may be going too far.
Specifically, when it comes to the marketing of Tiger Woods, one of the premier golfers of our time; in the United States, he is seen as an example of African American success, in Asia he is a sports star with
Asian heritage, and in Europe he is seen as a great young athlete who regularly beats older golfers. 65
Combining Global and Local Marketing Strategies
Some firms follow a mixed or combination strategy. For instance, Unilever, Playtex, and Black & Decker have augmented their global strategies with local executions. In taking such an adaptive approach,
global advertisers with knowledge of cross-cultural differences can tailor their supplemental messages more effectively to suit individual local markets. For example, a study has indicated that while U.S.
consumers focus more on the product-related claims made in advertisements, Taiwanese consumers focus more on the appropriateness of the ad, such as its aesthetic qualities. 66 There is also some evidence
to suggest that Spanish ads may contain a larger proportion of affiliation appeals than U.S. ads do because of Spain’s cultural inclination toward femininity in its societal norms (U.S. societal norms tend to
reflect masculinity). 67 Because concepts and words often do not easily translate and many regions of the country have their own language, advertisements in China are likely to be more effective if they rely
heavily on symbols rather than text. 68 A recent study dealing with visual standardization in print ads concluded that “the standardized approach to global advertising may be able to convey a degree of
uniformity in meaning when relying on visually explicit messages.... This suggests that there is an ability to create a general consensus of meaning across various cultures by using strong visual images. 69 It is
also important to note that consumers in different countries of the world have vastly different amounts of exposure to advertisements. For instance, the daily amount of advertising aimed at Japanese consumers,
at almost $6 a day, is 14 times the amount aimed at the average Laotian consumer over the course of an entire year. 70 Even so, Cold Stone Creamery is attempting to convey a different image to Japanese
consumers—that eating Cold Stone is ultracool—and therefore shuns traditional advertising and instead gives out free samples in upscale shopping areas and locates its outlets near ultra-high-end retailers like
Versace and Louis Vuitton. 71
A recent study of foreign advertisers in China found that 11 percent employed a standardized (or global) strategy, 12 percent used a localized strategy, and the remaining 77 percent favored a combination
strategy. Of the seven advertising components that were studied, localizing language to blend with the local culture was considered to be the most important, followed by the need to localize product attributes,
models, colors of ads, humor, scenic background, and music. 72 Additionally, it has been reported that many of the Western companies that have not been successful in China have acted as if what had worked
well in other parts of the world would also prove successful in China.
Frameworks for Assessing Multinational Strategies
Global marketers face the challenge of creating multinational strategies in the form of marketing and advertising programs capable of communicating effectively with a diversity of target markets. To assist in this
imposing task, various frameworks have been developed to determine the degree to which marketing and advertising efforts should be either globalized or localized, or mixed or combined.
To enable international marketers to assess the positions their products enjoy in specific foreign markets, Table 13.9 presents a five-stage continuum that ranges from mere awareness of a foreign brand in a
local market area to complete global identification of the brand; that is, the brand is accepted “as is” in almost every market, and consumers do not think about its country of origin.
Table 13.9 A Product Recognition Continuum for Multinational Marketing
FACTORS EXAMPLES
Stage One Local consumers have heard or read of a brand marketed elsewhere but cannot get it at home; a brand is “alien” and unavailable but may be desirable [e.g., Rover (English autos), Havana cigars
(made in Cuba), or medicine not approved by the FDA but sold in Europe].
Stage Two Local consumers view a brand made elsewhere as “foreign,” made in a particular country but locally available (e.g., Saab autos, French wine). The fact that the brand is foreign makes a difference
in the consumer’s mind, sometimes favorable, sometimes not.
Stage Three Local consumers accord imported brand “national status”—that is, its national origin is known but does not affect their choice (e.g., Molson beer in the United States, Ford autos in
southern Europe).
Stage Four Brand owned by a foreign company is made (wholly or partly) domestically and has come to be perceived by locals as a local brand; its foreign origins may be remembered, but the brand has been
“adopted” (“naturalized”). Examples are Sony in the United States, Coca-Cola in Europe and Japan.
Stage Five Brand has lost national identity and consumers everywhere see it as “borderless” or global; not only can people not identify where it comes from but they never ask this question. Examples include
the Associated Press and CNN news services, Nescafé, Bayer aspirin.
Source: Based on: George V. Priovolos, “How to Turn National European Brands into Pan-European Brands.” Working paper. Hagan School of Business, Iona College, New Rochelle, New York.
Table 13.10 presents a framework that focuses on four marketing strategies available to a firm contemplating doing business on a global basis. A firm might decide either to standardize or localize its product
and either standardize or localize its communications program (thus forming a two-by-two matrix). The four possibilities that this decision framework considers range from a company incorporating a global
strategy (or standardizing both product and communications program) to developing a completely local strategy (or customizing both the product and communications program) for each unique market. In the
middle there are two mixed strategies. All four cells may represent growth opportunities for the firm. To determine which cell represents the firm’s best strategy, the marketer must conduct cross-cultural
consumer analysis to obtain consumer reactions to alternative product and promotional executions. To illustrate the strategic importance of product uniformity, Frito-Lay, the U.S. snack-food giant, has been
standardizing quality and reducing the many local brand names of potato chip companies that it owns throughout the world. This effort is moving the company along a common global visual appearance that
features the Lay’s logo as a global brand. Its efforts are driven by research that reveals that potato chips are a snack food that has widespread appeal throughout much of the world. 73
Table 13.10 A Framework for Alternative Global Marketing Strategies
PRODUCT STRATEGY COMMUNICATION STRATEGY
STANDARDIZED COMMUNICATIONS LOCALIZED COMMUNICATIONS
Standardized Product GLOBAL STRATEGY: Uniform Product/Uniform Message MIXED STRATEGY: Uniform Product/Customized Message
Localized Product MIXED STRATEGY: Customized Product/Uniform Message LOCAL STRATEGY: Customized Product/Customized Message
Another orientation for assessing whether to use a global versus local marketing strategy concentrates on a high-tech to high-touch continuum. Product standardization appears to be most successful for high-
involvement products that approach either end of the high-tech/ high-touch continuum. In other words, products that are at either extreme are more suitable for positioning as global brands. In contrast, low-
involvement products in the midrange of the high-tech/high-touch continuum are more suitably marketed as local brands, using market-by-market executions. 74 To illustrate, on a worldwide basis, consumers
interested in high-involvement, high-tech products share a common language (such as “bytes” and “microprocessors”), whereas advertisements for high-involvement, high-touch products tend to use more
emotional appeals and to emphasize visual images. In either case, according to this perspective (high-involvement products that are either high-tech or high-touch), such products are candidates for global
promotional communications.
Some researchers have written that globalization (or standardization) and localization should be viewed as two ends of a continuum and that often the key to success is to “be global but to act local.” It is also
generally an error to assume that demographic segments in other nations would want to be or act like Americans. When looking for success in a foreign market, it has been suggested that a company should
remember the following three Ps—place, people, and product. Table 13.11 presents the specific elements of these three Ps and cites the appropriate marketing strategy when using a standardization approach
and when using a localization approach. 75
Table 13.11 Degree of Fit Between Marketing Strategies and the Three Ps
MARKETING STRATEGIES
THREE PS SPECIFIC ELEMENTS STANDARDIZATION LOCALIZATION
Place Economy Prosperous Struggling
Partners Few Plentiful
Competition Low Intense
People Tastes Little preference High preference
Sophistication High Low
Segments Few Many
Classification Industrial/consumer durables Consumer nondurables
Products Technology High Low
Culture bound Low High
Reputation Sterling Poor or unknown
Product perception High Low
Source: Copyright © 1999 by M.E. Sharpe, Inc. From Journal of Marketing Theory and Practice, vol. 7, no. 2 (Spring 1999): 101. Used with permission. All Rights Reserved. Not for reproduction.
Global Web Sites
When it comes to the design of e-commerce Web sites, a five-nation research study suggests that consumers react best when content is adapted to their local needs. While in the past some companies felt that
local adaptation involved no more than simply translating Web pages into the local language, it is now felt that special attention must also be paid to a number of other factors, including local time and date
formats, units of measurement, addresses and telephone numbers, layout and orientation of Web pages, icons, symbols, color, and aesthetics. 76 Still further, one study of American and German Internet users
revealed that German users were more likely to withhold or alter personal information on the Internet than American users. Analysis suggests that the German personality has a large private space and a small
public space, which translates into a great sense of personal privacy; whereas the opposite is true of the American personality. 77 As a recent study suggests, “understanding the characteristics of local cultures
and their impact on Internet use and access should facilitate more accurate projections of sales and customer acquisition growth rates. 78
Perhaps because of the dominance of English-language pages on the Internet, non–English-speaking European nations appear to be out to distinguish themselves and their cultures by designing Web sites that in
some way or other reflect their countries and specific cultures. So German Web sites might employ bright colors and a geometrical layout to give it a “German feel”; a French Web site might have a black
background; a Dutch Web site might offer video downloads; and a Scandinavian Web site might provide a variety of images of nature. 79 Indeed, a recent study of global American brands examined how these
brands standardize their Web sites in Europe (United Kingdom, France, Germany, and Spain). The study found that while manufacturers’ Web sites did have a minimal level of uniformity with respect to color,
logo, and layout, the textual information and visual images were dissimilar from one market to the next. Still further, as with traditional advertising media, standardization for durable goods was higher than for
nondurables. 80 In yet another study, researchers examined the domestic and Chinese Web sites of U.S.-based multinational companies. Findings show that the Internet is not a culturally neutral medium, but is
full of cultural markers that allow country-specific Web sites to possess a feel and a look that is unique to the local culture. For example, while Web sites intended for the U.S. consumer often contained
patriotic phrases and references to September 11th, Chinese Web sites were loaded with Chinese cultural symbols (e.g., the Great Wall of China, Chinese festivals). The managerial implication of the research
is that consumers relate best to Web sites that have a local feel because it reduces the anxiety associated with the Internet (it is a relatively new medium) and makes navigation easier. 81
Cross-Cultural Psychographic Segmentation
Learning Objective 13.4
To Understand How Lifestyle and Psychographic Segmentation Can Be Used in Developing Global or Local Marketing Strategies.
The paradox in cross-cultural consumer research is that although worldwide consumers may be similar in many ways (e.g., the increased number of women who work outside of the home), any differences in
attitudes or behavior can be crucial and also provide opportunities for segmenting consumers in terms of cultural differences. For example, although more than 50 percent of Japanese and American women
work outside the home (which enhances the need for many convenience and time-saving products), Japanese women have been slower to embrace the liberated attitudes of their counterpart working women in
the United States. 82 Seen in this light, the determination of whether or not to market a time-saving cleaning device as a world brand is a critical strategic decision. Some firms might attempt to establish a global
branding strategy, whereas others would design an individual or local marketing strategy—one that treats Japanese and American working women differently. One marketing authority aptly summed up the
issues years ago by stating: “The only ultimate truth possible is that humans are both deeply the same and obviously different....” 83
This book endorses the same thesis. Earlier chapters have described the underlying similarities that exist between people and the external influences that serve to differentiate them into distinct market segments.
If we believe in tailoring marketing strategies to specific segments of the American market, it follows then that we also believe in tailoring marketing strategies to the needs—psychological, social, cultural, and
functional—of specific foreign segments.
Global psychographic research often reveals cultural differences of great importance to marketers. For example, Roper Starch Worldwide, a major multinational marketing research company, interviewed
35,000 consumers in 35 countries in order to identify shared values, irrespective of national borders. The research sought to uncover the bedrock values in peoples’ lives in order to understand the motivations
that drive both attitudes and behavior. After completing the interviews in North and South America, Asia, and Europe, six global value groups were uncovered: Strivers (e.g., ambitious and materialistic),
Devouts (e.g., responsible, respectful, and conservative in outlook), Altruists (e.g., unselfish in their concern for others, society and the future), Intimates (e.g., focus on social relationships and family), Fun
Seekers (e.g., young in age and outlook, they value adventure and good times), andCreatives (e.g., seek knowledge, insight and have a keen interest in books and new media). 84
Summary
With so much diversity present among the members of just one nation as in the United States, it is easy to appreciate that numerous larger differences exist between citizens of different nations having different
cultures, values, beliefs, and languages. If international marketers are to satisfy the needs of consumers in potentially very distinct markets effectively, they must understand the relevant similarities and differences
that exist between the peoples of the countries they decide to target.
When consumers make purchase decisions, they seem to take into consideration the countries of origin of the brands that they are assessing. Consumers frequently have specific attitudes or even preferences
for products made in particular countries. These country-of-origin effects influence how consumers rate quality and, sometimes, which brands they will ultimately select.
As increasing numbers of consumers from all over the world come in contact with the material goods and lifestyle of people living in other countries and as the number of middle-class consumers grows in
developing countries, marketers are eager to locate these new customers and to offer them their products. The rapidly expanding middle classes in countries of Asia, South America, and Eastern Europe
possess relatively substantial buying power because their incomes are largely discretionary (necessities like housing and medical care are often provided by the state for little or no cost).
For some international marketers, acculturation is a dual process: First, marketers must learn everything that is relevant to the product and product category in the society in which they plan to market, and then
they must persuade the members of that society to break with their traditional ways of doing things to adopt the new product. The more similar a foreign target market is to a marketer’s home market, the
easier is the process of acculturation. Conversely, the more a foreign target market is different, the more difficult the process of acculturation.
Some of the problems involved in cross-cultural analysis include differences in language, consumption patterns, needs, product usage, economic and social conditions, marketing conditions, and market
research opportunities. There is an urgent need for more systematic and conceptual cross-cultural analyses of the psychological, social, and cultural characteristics concerning the consumption habits of foreign
consumers. Such analyses would identify increased marketing opportunities that would benefit both international marketers and their targeted consumers.
Discussion Questions
1. With all the problems facing companies that go global, why are so many companies choosing to expand internationally? What are the advantages of expanding beyond the domestic market?
2. In terms of consumer behavior are the cultures of the world becoming more similar or more different? Discuss.
3. What is cross-cultural consumer analysis? How can a multinational company use cross-cultural research to design each factor in its marketing mix? Illustrate your answer with examples.
4. What are the advantages and disadvantages of global promotional strategies?
5. Should Head & Shoulders shampoo be sold worldwide with the same formulation? In the same packaging? With the same advertising message? Explain your answers.
6. a. If you wanted to name a new product that would be acceptable to consumers throughout the world, what cultural factors would you consider?
b. What factors might inhibit an attempt by Apple to position a new laptop computer as a world brand?
7. An American company is introducing a line of canned soups in Poland.
a. How should the company use cross-cultural research?
b. Should the company use the same marketing mix it uses in the United States to target Polish consumers? Explain your answer.
c. Which, if any, marketing mix components should be designed specifically for marketing canned soups in Poland? Explain your answer.
8. Mercedes-Benz, a German car manufacturer, is using cross-cultural psychographic segmentation to develop marketing campaigns for a new two-seater sports car directed at consumers in different
countries. How should the company market the car in the United States? How should it market the car in Japan?
9. What advice would you give to an American retailer who wants to sell women’s clothing in Japan?
10. Via online research, identify two mistakes that American companies have made in targeting consumers in other countries. Discuss how these mistakes could have been avoided if the companies
involved had adequately researched some of the issues listed in Table 13.8.
Exercises
1. Have you ever traveled outside the United States? If so, please identify some of the differences in values, behavior, and consumption patterns you noted between people in a country you visited and
Americans.
2. Interview a student from another culture about his or her use of (a) credit cards, (b) fast-food restaurants, (c) shampoo, and (d) sneakers. Compare your consumption behavior to that of the person
you interviewed and discuss any similarities and differences you found.
3. Select one of the following countries: Mexico, Brazil, Germany, Italy, Israel, Kuwait, Japan, or Australia. Assume that a significant number of people in the country you chose would like to visit the
United States and have the financial means to do so. Now, imagine you are a consultant for your state’s tourism agency and that you have been charged with developing a promotional strategy to attract tourists
from the country you chose. Conduct a computerized literature search of the databases in your school’s library and select and read several articles about the lifestyles, customs, and consumption behavior of the
people in the country you chose. Prepare an analysis of the articles and, on the basis of what you read, develop a promotional strategy designed to persuade tourists from that country to visit your state.
Key Terms
• acculturation 418
• country-of-origin effects 410
• cross-cultural consumer analysis 412
• European Union 408
• global strategy 424
• local strategy 424
• mixed strategies 424
• multinational strategies 424
• North American Free Trade Agreement (NAFTA) 408
• product standardization 424
• three Ps 425
• world brand 420
Case One: Japan to Apple’s iPhone: “No Thanks!”
The new version of Apple’s iPhone has generally been a strong seller worldwide, except in Japan. While some analysts had estimated that Apple would sell a million units of its latest iPhone in Japan, revised
estimates put the number at more like 500,000 phones. So what’s the problem? The phone uses the faster 3G network and offers a touch screen. And Apple iPods and computers are popular in Japan.
Well, it turns out that Apple iPhone’s use of the 3G network is not a big deal in Japan, because 3G access has been a standard feature on Japanese cell phones for several years. And as far as the touch screen
is concerned, some Japanese consumers feel that they would have problems getting used to it. Perhaps the biggest hurdle facing Apple, however, is what the iPhone doesn’t have. Remember, Japanese
consumers enjoy some of the world’s most technologically advanced cell phone features, such as “a high-end color display, digital TV-viewing capability, satellite navigation service, music player and digital
camera.” Another “must have” feature in Japan, lacking in the iPhone, is “emoji,” which is clip art that can be inserted into sentences to make e-mails more attractive. In addition, many mobile phones in Japan
allow their users to use their phones as debit cards or train passes.
Questions
1. Did Apple err in trying to sell its latest iPhone in Japan?
2. Is the Japanese cell phone market similar to the cell phone markets in other countries?
Source: Yukari Iwatani Kane, “Apple’s Latest iPhone Sees Slow Japan Sales,” Wall Street Journal, September 15, 2008, B3.
Case Two: Would Mickey Mouse Eat Shark’s Fin Soup?
Controversy started brewing at Hong Kong Disneyland even before the park opened in fall 2005. At Disney theme parks around the world, weddings and wedding receptions are a profitable business. Disney
is planning to offer shark’s fin soup as an option on wedding reception menus at Hong Kong Disneyland.
Clearly, Disney wants to show its appreciation for Chinese traditions, and claims that it is doing nothing more than following local standards—the dish is considered an essential part of a Chinese wedding
banquet, and can be priced at up to $150 at the best restaurants. However, environmental groups from all over the world are up in arms over the prospect of Disney serving this soup, which points out a
difference between Chinese and Western traditions.
Although shark’s fin soup has been a Chinese favorite for 200 years, some environmental groups are concerned that China’s increasing wealth has led to a greater appetite for rare species. For example, Hong
Kong authorities recently stopped a shipment of 1,800 freeze-dried penguins that were being smuggled into mainland China. Some animal advocates are afraid that down the road entire species could be
threatened.
Question
1. As a member of the top management team at the Walt Disney Company, do you keep or delete shark’s fin soup from the wedding banquet menu at Hong Kong Disneyland?
Source: Keith Bradsher, “Chinese Delicacy Has Disney in Turbulent Waters,” New York Times, June 17, 2005, C1, C7.
Consumer Behavior, Tenth Edition
Chapter 13: Cross-Cultural Consumer Behavior: An International Perspective
ISBN: 9780135053010 Authors: Leon G. Schiffman, Leslie Lazar Kanuk, Joseph Wisenblit
Copyright © Pearson Education (2010)
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