Today’s market is characterized by highly competitive organizations which are all vying for consumer’s loyalty. Firms are faced with the challenge to maintain their own competitive edge to be able to survive and be successful. Strategies are carefully planned and executed to gain the ultimate goal of all – company growth. However, external factors are not the only elements which influence growth. There are also internal factors and components working within the organization which shape the direction of the company.
Marketing is a field in economy that existed over hundred years and catered the needs and wants of people by creating, offering, and exchanging products of value with others. Along with the changing business world and marketing, customers change as well, becoming more demanding and knowledgeable than before. In turn, company management worldwide had shifted their focus on their clients or customers so as to stay successfully in business. This transition meant that organizations have to completely reformulate their conventional business aims and purposes from being process-focused to customer-centered. Hence, employing proactive customer commitment involves the consideration on culture and infrastructure (Lowenstein, 1997).
Despite the economic and technological conditions that make it possible now to promote products and services in a larger consumer market, there are other factors that still need to be considered for a business organization reach out easier to their target market. Looking into the characteristics and thought processes of the people still holds as the most significant factor to be looked into by the individuals in the field of sales and marketing. The large scope of market can pose a hindrance to a successful marketing strategy in terms of over generalized definition of the target or niche market.
Meanwhile, cultural diversity necessitates a contextual and cultural examination of the values, behaviors and attitudes that underlie every individual (Temple, 1997). Thus, while difference in culture itself is sufficient explanation in the misunderstanding and sometimes barriers that governs relationships of different nationalities, extending this dissimilarity is instrumental in establishing better relationships with other people in terms of marketing. Moreover, marketing offer and create opportunities and awareness from other cultures.
This paper aims to delve in the discussions of understanding the importance of culture diversity in marketing. It will tackle on the subject of consumer behavior as the primary manifestation of cultural diversity in marketing. Alongside theories and marketing strategies, this paper provides an evaluation on the increasing importance of the two multifaceted but interrelated concepts.
Culture Diversity and Marketing
Culture is an all inclusive system of communications which incorporates the biological and technical behavior of human beings with their verbal and nonverbal systems of expressive behavior. Culture is the sum total of a way of life, including such things as expected behavior, beliefs, values, language, and living practices shared by members of a society; it is the pattern of values, traits, or behaviors shared by the people within a region. Culture consists of both explicit and implicit rules through which experience is interpreted. Basically, Murphie and Potts (2003) believes that the function of culture is to establish modes of conduct, standards of performance, and ways of dealing with interpersonal and environmental relations that will reduce uncertainty, increase predictability, and thereby promote survival and growth among the members of any society. Culture influences behavior and explains how a group filters information; cultural meanings render some forms of activity normal and natural and others strange or wrong. Cultural beliefs, values, and customs continue to be followed so long as they yield satisfaction. However, when a specific standard no longer fully satisfies the members of a society, it is modified or replaced, so that the resulting standard is more in line with the current needs and desires of the society. Thus, culture gradually but continually evolves to meet the needs of society.
Culture has been identified as one of the important determinants of business decision-making both directly and indirectly. For instance, in MNCs, global diversification affects the firms’ performances. However, there are some factors to be considered on such generalizations. The increasing importance of cultural diversity in marketing is seen as an advantage to go along with the current marketing changes brought about by globalization and global competition.
The Importance of Cultural Diversity in Marketing
With the advent of globalization, there is a need to understand culture in relation to marketing. In the cases of multinational enterprises, the understanding of culture diversity serves an opportunity and at the same time assessment in the company’s performance. International businesses consider global cultural diversifications as positive factors in performance evaluation of firms (Gomez-Mejia & Palich, 1997). To meet the dynamic demands of the international market, understanding diversity opens opportunity for development and improvement or even expansion.
In an article written by Stever Robbins (2004), “Diversity brings thoughts, feelings, and cultural knowledge that benefits decision making, marketing, operations, culture-building, hiring, firing – just about everything a business does.” It serves as an opportunity to evaluate, change or develop the important aspects of the organization and the operations. The considerations in diversity will aid in the assessment of some decisions to be taken at hand. In marketing, diversity in culture can hint the introduction of new markets. Robbins (2004) also provides some ways to take diversity into advantage. Among these are: the identification of previously overlooked cultural markets, creation of new products for existing markets, change in the corporate culture for attraction of different employee mix, formation of relationships and making inroads at international perspectives, and getting things done in better ways.
While it is true that the image of products has a great influence on how well they sell, great effort is also required in order to build up distribution networks and find retail outlets worldwide. For example, securing a market for a product does not end with signing a contract, but involves building up personal relationships through repeated visits and socializing with business partners. Furthermore, the way in which products enter a new market is unrelated to the associations derived from their original creation and mode of use. For example, in postwar Japan, products originating in Europe and America were given new associations and images in accordance with local conditions as they became established as elements of a new lifestyle. This experience was a great advantage to Japanese companies in their expansion into the Asian market, as Japan's prior experience of social change and the promotion of new products to fit new lifestyles, formed a common basis on which sales activities in Asia could be built (Berger & Huntington, 2003).
In the study conducted by Gomez-Mejia and Palich (1997), cultural diversity have pointed out that cultural differences can lead to unique consumer preferences requiring customization of the marketing mix and function to promote product demand; prospective innovations; and effective technology implementations. As a case, the trade wars between different brand names of blue jeans come to mind (Berger & Huntington, 2003). Selling what is essentially the same garment means selling an image. In the shopping arena the engineered quality of a given product remains important, but its quality in the global market is increasingly derived from the need horizon of the customer. The “trick” of the manager is to see to it that the quality of the product within the context of that market is unique and competitive. Effective marketing in the global arena requires the manager to fuse the engineered and the imagined concepts to stimulate large groups of customers to do the same, ideally on a global scale.
Furthermore, understanding culture is important in analyzing consumer needs and behaviors. According to Kotler and Armstrong (2001), consumer buying behavior refers to the buying behavior of the individuals and households who buy the goods and services for personal consumption. Consumers around the world are different in various factors such as age, income, education level and preferences which may affect the way they avail of goods and services. This behavior then impacts how products and services are presented to the different consumer markets. Companies now face the challenge of making its target consumers respond accordingly to their marketing efforts. Those who understand its consumers’ responses will have a great competitive advantage. The starting point towards this is through the stimulus-response model of buyer behavior which involves examining the marketing and other stimuli in the consumer’s black box that translates into buyer responses (Kotler & Armstrong, 2001). Marketing stimuli often consist of the four Ps of marketing: product, price, place and promotion while the other stimuli may include economic, technological, political and cultural factors which exist in the marketing environment.
Characteristics Affecting Consumer Behavior
There are many components which influence consumer behavior namely: cultural, social, personal and psychological (Kotler & Armstrong, 2001). These characteristics cannot be controlled by the companies; therefore, a need to assess these elements in order to create an effective marketing plan. However, cultural factors will be given emphasis since it is the main subject of this paper.
Cultural factors include culture, subculture and social class which all exert the broadest and deepest influence on buyer behavior. Culture is the most basic cause of the wants and behaviors of a consumer because it cultivates how a person chooses its values and learns its standards for achievement and success. Moreover, it varies from country to country and it can also have a shift within its own sphere which may cause a new product entry. On the other hand, subculture refers it the smaller groups of people who share the same value system and it can include nationalities, religions, racial groups and geographic regions. Many of these subcultures compose the important market segments for which products are specifically designed and marketed. Lastly, social classes are the divisions in a society composed of people who share similar values, interests and behaviors. These form the social class structure which exists in almost every society. It is not determined by a single component alone but a combination of different elements such as occupation, income, education, wealth and other variables (Kotler & Armstrong, 2001). These social classes show individual product and brand preferences in areas such as clothing, furniture, cars and leisure activities.
Theory on Consumer Behavior
Since consumer behavior is defined as: “the activities that people engage in when selecting, purchasing, and using products and services so as to satisfy needs and desires…such activities involve mental and emotional processes, in addition to physical actions” (Wilkie, 1990), there are many factors that determine these activities, and the product is just one of them. There are some frameworks that helps explain customer behavior are brand orientation model and integrated framework for cross-cultural consumer behavior. Others, on the other hand, are expressed through demographic research, such as the relationship of gender on consumer behavior. These models and studies are not only applicable to fashion retail but also to consumer behavior in general products.
The Brand Orientation Model is one of the models that can help explain the theory of consumer behavior. Bridson and Evans (2004) defined brand orientation “as the degree to which the organization values brands and its practices are oriented towards building brand capabilities. Such capabilities include using the retail brand as a mark of distinction, a means of satisfying consumer’s functional purchase needs, a source of value adding and a symbolic reflection of consumers” (p.404). This model has four components namely: distinctiveness; functionality; value-adding; and symbolic. Each can influence the behavior of consumers. Distinctiveness refers to the identification of critical values and beliefs about the roles brands play in the organization, which includes a sign of ownership, guarantee, shorthand device, legal protection, logo and resource (Bridson & Evans, 2004). Functionality refers to the brand’s tangible, rationally assessed performance, or the extent to which brands satisfy consumers’ basic or rational needs (Bridson & Evans, 2004). On the other hand, value-adding capabilities refer to the critical beliefs and capabilities the organization employs to add value beyond functional capabilities, through adding features and benefits that differentiate the brand from competitors (Bridson & Evans, 2004). This includes experiential, communicates, physical, service, quality, experience and values. Finally, the symbolic capabilities refer to the representational characteristics of the product, which include representational, emotional, self expression, self image, personality, psychic value and icon (Bridson & Evans, 2004).
While the brand orientation model expresses the need for symbolic capabilities, it fails to explain clearly the relationship of consumer behavior with culture. This is where the integrated framework of Luna and Gupta (2001) is different. It is based on the etic and emic philosophy of culture. The etic philosophy is based on the definition of culture as “the collective programming of the mind which distinguishes the members of one group or category of people from another’’ (Hofstede, 1997). On the other hand, the emic philosophy stresses upon understanding issues from the perspective of the subjects being studied (Hofstede, 1997). As cited from McCracken (1988) activity, specifying the behaviors and objects that issue from both.
Based on the integrated model, culture influences behavior through its manifestations: values, heroes, rituals, and symbols (Luna & Gupta, 2001). The combination of both etic and emic perspective on the manifestations, can basically reveal culture’s strong relation with customer behavior. Values are the basis of one’s attitude or restriction in attitude. Some examples of values include freedom, pleasure, inner harmony, and happiness. Heroes, on the other hand, refer to icons in the society that may have an impact on people of different levels. Examples of heroes are sports figure or popular culture figures (e.g. celebrities as endorsers, mascots, etc.). Luna and Gupta (2001) stated that heroes may influence consumer behavior through their association with certain products and brands. The same goes with rituals, or symbolic activities commonly performed over and over, such as bathing, tooth brushing, attending to mass, to school, etc. Their involvement on the consumption of consumer products makes them important for consumer behavior. Finally, symbols are equally important because different cultures have different symbols that they favor i.e. language, logos, signs, etc (Luna & Gupta, 2001). Basically, the integrated framework suggests that consumers may choose particular products/services not only because these products/services provide the functional or performance benefits expected, but also because products can be used to express consumers’ personality, social status or affiliation (symbolic purposes) or to fulfill their internal psychological needs, such as the need for change or newness (emotional purposes) (Kim et al, 2002).
Conclusion
Understanding cultural diversity in marketing is a potential opportunity for various businesses development. Because of the wide array of consumers’ needs and demands as well as to the growing scope of the global market, international businesses need to understand every aspect of consumer’s culture. Clearly, marketing has become an important dimension of the global business culture. Accordingly, modern businesses are highly fused with marketing terminology on all perspectives. Issues that were once important in successfully selling on the market such as cultural diversifications are no longer the foremost concern of today's managers. What matters in the global market is the emergence and acceptance of a customer's identification with a given product and the recognition of its diverse qualities in different regions of the world. Modern marketing on the global level is not merely a matter of the art of salesmanship. Though it is still important, the task now is to target the creation of markets themselves and the promotion of products for consumer satisfaction.
Word count: 2558 (including title and in-text citations)
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