Definition of Cultural and Environmental Influences on Consumer Behavior

Introduction

Everybody in this world is a consumer. Every day of our life we are buying and consuming an incredible variety of goods and services. However, we all have different tastes, likes and dislikes and adopt different behavior patterns while making purchase decisions. Many factors affect how we, as individuals and as societies, live, buy, and consume. External influences such as culture, ethnicity, and social class influence how individual consumers buy and use products, and help explain how groups of consumers behave. The study of culture encompasses all aspects of a society such as its religion, knowl­edge, language, laws, customs, traditions, music, art, technology, work patterns, products, etc. Culture is an extremely critical and all pervasive influence in our life.

CULTURE – Meaning

For the purpose of studying consumer behavior, culture can be defined as the sum total of learned beliefs, values and customs that serve to guide and direct the consumer behavior of all members of that society. Howard and Sheth have defined culture as “A selective, manmade way of responding to experience, a set of behavioral pattern”. Thus, culture consists of traditional ideas and in particular the values, which are attached to these ideas. It includes knowledge, belief, art, morale, law, customs and all other habits acquired by man as a member of society. An accepted concept about culture is that includes a set of learned beliefs, values, attitudes, habits and forms of behavior that are shared by a society and are transmitted from generation to generation within that society.

Culture is learned through the following three ways:

Formal learning: Parents and elders teach children the proper way to behave. For instance, you have been taught that you need to study to be successful and happy in life. This learning may influence your response both as a student and individual towards education.

Informal learning: We learn by imitating the behavior of our parents, friends, or by watching TV and film actors in action

Technical learning: Instructions are given about the specific method by which certain things to done such as painting, dancing, singing etc.

Characteristics of Culture

Culture is learned.

Culture regulates society–norms, standards of behavior, rewards and punishments.

Culture makes life more efficient

All members follow same norms.

Culture is adaptive.

Culture is environmental.

Multiple cultures are nested hierarchically.

Culture also determines what is acceptable with product advertising. Culture determines what people wear, eat, reside and travel. Cultural values in India are good health, education, respect for age and seniority. But in our culture today, time scarcity is a growing problem, which implies a change in meals. Some changes in our culture:

Convenience: As more and more women are joining the work force there is an increasing demand for products that help lighten and relieve the daily household chores, and make life more convenient. This is reflected in the soaring sale of washing machines, microwaves, pressure cookers, mixer-grinders, food processors, frozen food etc.

Education: People in our society today wish to acquire relevant education and skills that would help improve their career prospects. This is evident from the fact that so many professional, career oriented educational centers are coming up, and still they cannot seem to meet the demand. As a specific instance count the number of institutions offering courses and training in computers that has opened in your city.

Physical appearance: Today, physical fitness, good health and smart appearance are on premium today. Slimming centers and beauty parlours are mushrooming in all major cities of the country. Cosmetics for both women and men are being sold in increasing numbers. Even exclusive shops are retailing designer clothes.

Materialism: There is a very definite shift in the people’s cultural value from spiritualism towards materialism. We are spending more money than ever before on acquiring products such as air-conditioners, cars CD players etc, which adds to our physical comfort as well as status.

Types of Culture

National culture

The culture prevalent in a nation, common to everyone

Popular culture

The culture of the masses with norms of mass appeal

Subculture

The culture of a group within the larger society

Group identification based on nationality of origin, race, region, age, religion, gender, etc.

Corporate culture

The company’s values, rituals, customs, myths and heroes

Hoffstede’s Five Dimensions of Culture

Culture has a profound impact on the way consumers perceive themselves, products they buy and use, purchasing processes, and the organisations from which they purchase. Marketers, however, are giving more attention to understanding macro cultures and how they affect consumer behavior. Hoffstede found five dimensions of culture that are common among sixty six countries. These dimensions serve as a foundation for characterizing,­ comparing and contrasting specific national cultures, and they are helpful in identifying environmentally sensitive segments of the market.

Individualism versus collectivism (Pursuit of self or group interest) Individualism describes the relationship between an individual and fellow individuals, or the collectivity that prevails in society. Table below depicts the attitudinal and behavioral differences associated with individualism and collectivism.

Power distance ( Social inequality and submission to authority) Power distance reflects the degree to which a society accepts inequality in power at different levels in organisations and institutions. It can affect preferences for centralization of authority, acceptance of differential rewards, and the ways people of unequal status work together.

                                                                                                Individualism versus Collectivism

Uncertainty avoidance (Tolerance/avoidance of ambiguity) Uncertainty avoidance concerns the different ways in which societies react to the uncertainties and ambiguities inherent in life. Some societies need well-defined rules or rituals to guide behavior, whereas others are tolerant of deviant ideas and behavior.

Masculinity/femininity (Segregation of male and female roles in society) This factor determines the extent to which societies hold values traditionally regarded as predominantly masculine or feminine. For instance, assertiveness, respect for achievement, and the acquisition of money and material possessions are identified with masculinity; and nurturing, concern for the environment and championing the underdog are associated with a culture’s feminity.

Abstract versus associative thinking Creation of value in products based on cause/effect logic or association among events without a logical link

Cultural Influences

Culture is that complex whole which includes knowledge, belief, art, law, morals, customs and any other capabilities and habits acquired by humans as members of society. Culture influences the pattern of living, of consumption, of decision-making by individuals. Culture is acquired and it can be acquired from the family, from the region or from all that has been around us while we were growing up and learning the ways of the world. Culture forms a boundary within which an individual thinks and acts. When one thinks and acts beyond these boundaries, he is adopting a cross-cultural behavior and there are cross-cultural influences as well. The nature of cultural influences is such that we are seldom aware of them. One feels, behaves, and thinks like the other members of the same culture. It is all pervasive and is present everywhere. Material culture influences technology and how it brings cultural changes like use of telephones, mobile phones, clothing styles and fashions, gives the marketers a chance to improve the product, packing, etc. to meet the needs of the customers.

Norms are the boundaries that culture sets on the behavior. Norms are derived from cultural values, which are widely told beliefs that specify what is desirable and what is not. Most individuals obey norms because it is natural to obey them. Culture outlines many business norms, family norms, behavior norms, etc. How we greet people, how close one should stand to others while conducting business, the dress we wear and any other patterns of behavior.

Culture keeps changing slowly over time; and is not static. Changes take place due to rapid technologies. In case of emergency, war, or natural calamities, marketers and managers must understand the existing culture as well as the changing culture and culture of the country where the goods are to be marketed. Major companies have adapted themselves to international culture and are accepted globally.

Coca Cola is sold all over the world. Procter & Gamble and other companies give cross-cultural training to their employees. By making cross-cultural mistakes, many companies have difficulty in pushing their products for example, (i) Coca Cola had to withdraw its 2 liters’ bottle from Spain, because it did not fit in the local refrigerator; (ii) Many countries are very traditional and do not like women displayed on the products. This acts as a detriment to business in those countries.

Variation in Cultural Values

There are three broad forms of cultural values as shown in the following figure.

                                                                                                                 Values Orientation influencing Behavior

Other Oriented Values

This shows the relationship between individuals and the society. The relationship influences marketing practices. If the society values collective activity, decisions will be taken in a group. It gives rise to following questions which affect consumer behavior.

Individual/ collective: Whether individual initiation has more value than collective activity?

Romantic orientation: This depicts whether the communication is more effective which emphasizes courtship or otherwise. In many countries a romantic theme is more successful.

Adult/ child theme: Is family life concentrated round children or adults? What role do children play in decision-making?

Masculine/ Feminine: Whether the society is male dominant or women dominant or balanced.

Competitive/ Cooperation: Whether competition leads to success. This is achieved by forming alliances with others.

Youth/ age: Are prestige roles assigned to younger or older members of the society. American society is youth oriented and Korean is age oriented. Decisions are taken by mature people in Korea.

Environment Oriented Values

Cleanliness: If a culture lays too much stress on cleanliness. There is scope for the sale of beauty creams, soaps, deodorants, insecticides, washing powder, vacuum cleaner, etc. In western countries, a lot of emphasis is placed on this aspect and perfumes and deodorants are widely used.

Performance/ status: A status oriented society cares for higher standards of living, and chooses quality goods and established brand names and high prices items. This is true for the United States, Japan, Singapore, Malaysia, Indonesia, Thailand and most Arabic countries.

In performance oriented societies, where rewards and prestige is based on an individual’s performance, less importance is given to brand names. Products which function equally well and may not be big brand names are used. Germans do not give the same amount of emphasis to brand names. The marketers adopt strategies accordingly.

Tradition/ change: Traditional oriented societies stick to the old product and resist innovation or new techniques. In traditional societies, there is less scope for new products, and old traditional products are in greater demand. In some societies which are upwardly mobile, consumers are looking for modern methods, new products, new models and new techniques.

Risk taking/ security: An individual who is in a secure position and takes a risk can be either considered venturesome or foolhardy. This depends on the culture of the society. For developing new entrepreneurs risk taking is a must. It leads to new product development, new advertising themes and new channels of distribution. Security oriented societies have little chances of development and innovation.

Problem solving/fatalist: A society can be optimistic and have a problem solving attitude or, be inactive and depend on fate. This has marketing implications on the registering of complaints when consumers are dissatisfied with the purchase of the products. Advertising plays an important part and gives guidance to the consumer, and removes these doubts to a great extent.

Nature: There are differences in attitude over nature and its preservation. Consumers stress on packing materials that are recyclable and environment friendly. Some countries give great importance to stop environmental pollution and to recycling of products.

Companies like P&G, Colgate-Palmolive captured a great extent of the market by offering products which are less harmful to the environment. They also use ingredients in the products which are not harmful in any way.

Self-Oriented Values

Active/passive: Whether a physically active approach to life is valued more highly than a less active orientation. An active approach leads to taking action all the time and not doing anything. In many countries, women are also taking an active part in all activities. This makes the society a highly active one, where everybody is involved in work.

Material/ non-material: In many societies money is given more importance, and a lot of emphasis is on being material minded. While in many societies things like comfort, leisure and relationships get precedence over being materialistic. Materialism can be of two types.

Instrumental materialism: which is the acquisition of things to enable one to do something or achieve something. Cars are used for transportation. People like to possess things of material value which would help them to bring efficiency.

Terminal materialism: is the requisition of materialism for the sake of owing it rather than for use-Art is acquired for owing it. Cultural differences play art important role in this type of materialism. Instrumental materialism is common in the United States of America, where as Japanese advertisements are mostly dominating terminal materialism.

Hard work/leisure: This has marketing implications on labor saving products and instant foods. Some societies value hard work and consider it as a fuller life. Others adopt labor saving devices and instant foods to have more leisure time at their disposal.

Postponed gratification/ immediate gratification: Should one save for the rainy day or live for the day? Sacrifice the present for the future, or live only for the day? Some countries like The Netherlands and Germany consider buying against credit cards as living beyond one’s means, whereas credit cards are very popular in America and other countries having a different cultural orientation, some prefer cash to debt. Some societies save for tomorrow; others enjoy the present and spend lavishly.

Sexual gratification/Abstinence: Some traditional societies curb their desires, food, drinks or sex, beyond a certain requirement. Muslim cultures are very conservative, and do not want their women to be seen in public or be exposed, so the Polaroid camera which gives instant photographs can be purchased and pictures can be taken by the family members without their women being exposed to the developers in a photo lab.

Humor/ serious: Should we take life lightly and laugh it off on certain issues or, take everything seriously? This is an- other aspect of culture. Advertising, personnel selling techniques and promotion may revolve around these themes and the way the appeal for a product is to be made in various cultures.

Subcultures and Consumer Behavior

Culture can be divided into subcultures. A subculture is an identifiable distinct, cultural group, which, while following the dominant cultural values of the overall society also has its own belief, values and customs that set them apart from other members of the same society.

Sub-culture categories are:

Nationality: Indian, Sri Lanka, Pakistan

Religion: Hinduism, Islam

Race: Asian, black, white

Age: young, middle aged, elderly

Sex: Male, Female

Occupation: Farmer, teacher, business

Social class: upper, middle, lower

Geographic regions: South India, North-eastern India

Regional, Ethnic, and Religious Influences on Consumer Behavior

The three major aspects of culture that have important effects on consumer behavior are regional, ethnic, and religious differences. Firstly, consumption patterns may differ in various regions of India and the world, and marketing strategy can sometimes be tailored specifically to these regions.

Secondly, our country has a number of different ethnic groups, and population trends will dramatically alter the demographic profile of the country in the next 50 years. In spite of its diversity, marketing strategies can be developed for this group.

Finally, religious beliefs and values can influence consumer. Many marketers are now becoming multicultural in their marketing activities by trying to appeal to a variety of cultures at the same time. Although the diversity of the Indian melting pot may be unique, there are many important ethnic groups in other areas of the world.

Age, Gender, and Household Influences on Consumer Behavior

Among the four major age groups, Teens, who need to establish an identity, are the consumers of tomorrow and have an increasing influence on family decisions. The somewhat disillusioned Generation X consists of smart and cynical consumers who can easily see through obvious marketing attempts. Baby boomers grew up in a very dynamic and fast-changing world, and this has affected their values for individualism and freedom. The 50 and older segment can be divided into two groups-the young again and the gray market. Neither group likes to be thought of as old. The affect of gender differences on consumer behavior is examined next. Sex roles are changing. Women are becoming more professional and independent, and men are becoming more sensitive and caring. Also, men and women can differ in terms of traits, information processing, decision styles, and consumption patterns.

Gender is consistent throughout lifetime, influencing customer values and preferences. Gender shows different consumption patterns and perceptions of consumption situations. E.g. the wedding ceremony.

Households play a key role in consumer behavior. The proportion of non-traditional households has increased due to factors such as

later marriages,

Cohabitation,

Dual-career families,

Increased divorce, and

Fewer children.

Households also exert an important influence on acquisition and consumption patterns. First, household members can play different roles in the decision process (gatekeeper, influencer, decider, buyer, and user). Second, husbands and wives vary in their influence in the decision process, depending on the situation-husband-dominant, wife-dominant, autonomic, or syncretic.

Psychographics: Values, Personality, and Lifestyles

The roles of psychographics in affecting the consumer behavior are detailed below.

Values are enduring beliefs about things that are important. They are learned through the processes of socialization and acculturation. Our values exist in an organized value system, with some values being viewed as more important than others. Some are regarded as terminal values and reflect desired end states that guide behavior across many different situations. Instrumental values are those needed to achieve these desired end states. Domain-specific values are those that are relevant within a given sphere of activity. Western cultures tend to place a relatively high value on material goods, youth, the home, family and children, work and play, health, hedonism, and technology. Marketers use tools like value segmentation to identify consumer­ groups with common values.

Personality consists of the distinctive patterns of behaviors, tendencies, qualities, and personal dispositions that make people different from one another. Approaches to the study of personality include

The psychoanalytic approach, which sees personality arising from unconscious internal struggles within the mind at key stages of development;

Trait theories, which attempt to identify a set of personality characteristics that describe and differentiate individuals, such as introversion, extroversion, and stability;

Phenomenological approaches, which propose that personality is shaped by an individual’s interpretation of life events

Social-psychological theories, which focus on how individuals act in social situations (e.g., compliant, detached, or aggressive); and

Behavioral approaches, which view an individual’s personality in terms of past rewards and punishments.

Marketers also measure lifestyles, which are patterns of behavior (or activities, interests, and opinions). These lifestyles can provide some additional insight into consumers’ consumption patterns. Finally, some marketing researchers use Psychographic techniques that involve all of these factors to predict consumer behavior. One of the most well known Psychographic tools is the Values and Lifestyle Survey (VALS).

Cross Cultural Consumer Behavior

Cross cultural marketing: Objectives and Policies

Cross-cultural marketing is defined as “the effort to determine to what extent the consumers of two or more nations are similar or different. This will facilitate marketers to understand the psychological, social and cultural aspects of foreign consumers they wish to target, so as to design effective marketing strategies for each of the specific national markets involved.”

Problems in Cross Cultural marketing

Problems related to product selection: The marketer going for cross cultural marketing has to select the customers/ market not on the basis of the superficial similarities of age or income, but by using the real motivating factors that prompt them to accept or reject products.

Problems related to promotion/marketing communication: e.g. Ariel in the middle east and also Pepsi

Problems related to pricing: the marketer has to adjust his pricing policies according to the local economic conditions and customs.

Problems related to selection of distribution channels: in Japan, P & G used this to sell soap

Cross-Cultural Consumer Analysis

To determine whether and how to enter a foreign market, we need to conduct some form of cross-cultural consumer analysis.

Cross-cultural consumer analysis can be defined as the effort to determine to what extent the consumers of two or more nations are similar or different. Such analysis 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.

                                                                                               Japanese and American cultural traits difference

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.

Alternative Multinational Strategies

Some of us may argue as markets are becoming more and more similar, standardized marketing strategies are becoming more and more feasible. But, some more would argue back that differences between consumers of various nations are far too great to permit a standardized marketing strategy. Whether to use shared needs and values as a segmentation strategy or to use national borders as a segmentation strategy? Shared needs and values would mean to appeal to consumers in different countries in terms of their common needs, values, and goals. Using national borders as a segmentation strategy would mean to use relatively different local or specific marketing­ strategies for members of distinctive cultures or countries.

                                                                                              Alternative Global Marketing Strategies

Favoring a World Brand: A lot of companies 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. For instance, Sony sells its Walkman in this fashion.

Adaptive Global Marketing: In contrast to the above, some other organizations imbibe a strategy that adapts their advertising messages to the specific values of particular cultures. A very good example here would be that of McDonald’s, which tries to localize its advertising to consumers in each of the cross-cultural markets in which it operates.

Cultural Variations & Non-Verbal Communication

In a culture we have many variations in non-verbal communications. Each culture assigns a meaning to non-verbal signs utilized by it. There are some variables in non-verbal communication. These are:

Use of time

Use of space

Friendship

Agreements

Things

Symbols

Etiquette

Time

Time is a resource which is distributed equally amongst everybody. Every person has the same amount of time at his disposal. What view individuals and societies take of time makes them different. Some can be classified under monochromic culture and others in polychromic culture. Some of the important differences between monochromic a polychromic culture are give in the table below.

                                                                                   Differences between Monochromic and Polychromic Culture

The meaning of time may be different in different cultures. Some people take time in making decisions according to the importance of decisions. Some insist on coming to the point directly in business transactions and are well prepared. Some keep appointments by the minute; others make people wait for a long time.

Space

Space may be related to prestige rather than the need. The higher the office, the bigger the office space and so on. Americans have the offices of executives on the top floor and tend to separate the office of subordinates. Japanese have their discount stores on the upper floor. Some cultures and individuals maintain a fair distance while transacting, others co-mingle easily. Americans maintain a fair distance while interacting with associates. Arabs stand very close to each other.

Friendship

Friendship plays an important role in business transactions. Good personal relationship and feelings matter most in a long term agreement. Social contacts developed by parties gain priority over technical specifications. Americans make friends easily, and drop them easily as well, because of both social and geographical mobility. Some cultures like Indian or Latin Americans have lasting relationships that endure for a long time and so does the business. Personal ties, personal trust leads to cooperation and a lot of transaction can take place between parties. Some want to transact business only with those whom they get along and, making money is secondary.

Agreements

All business when transacted is done under some agreements. These agreements may be written or just on an understanding between the two parties. Most people enter into an agreement, but friendship and kinship are also given a lot of importance. Verbal commitments are also binding in some cultures, where signing a contract is just a mere formality.

Things

Different cultures attach different meaning to things. Things include products as well as gifts given in certain business and social situations. An appropriate product in the form of a gift is to be carefully chosen. The gifts can be big or small. They can be given openly or presented privately. This depends on the practices followed in that particular country. Some want to make a show of the gift, by giving it in front of others. Others are secretive about it.

Symbols and Colours

Different countries attach different meanings to symbols, numbers and colours. Symbols can be flowers, triangles, pictures and animals, etc. Some numbers are considered lucky, and others not so lucky, or even unlucky, like 13, 4, etc. Colors have different interpretations. Pink is associated with a female, and blue with the male in the US, whereas it is just the opposite in Holland.

A list of colors and their interpretations is given below:

White: Symbol of mourning or death in the Far East, happiness, purity and peace in the United States.

Purple: Associated with death in many Latin American countries.

Blue: Symbolizes feminity in Holland and masculinity in the United States, Sweden, India, etc.

Red: Color for brides and children in India. Sign of masculinity in the UK and France, negative in Nigeria, Germany and positive in Denmark, Rumania and Argentina.

Yellow: Sign of death in Mexico, infidelity in France, celebrations in many countries including India.

White lilies: Suggestion of death in England.

Symbol of Numbers

7: Lucky in India, USA, Morocco, Nicaragua and Czechoslovakia.

13: Unlucky in many countries including India.

4: Symbol of death in Japan. Packing in 4s is avoided.

Triangle: Negative in Hong Kong and Taiwan, positive in Columbia.

Owl: Wisdom in the United States, bad luck in India.

Deer: Speed, grace in the United States; Homosexuality in Brazil.

Etiquette

These are accepted norms of behavior. Some behavior may be rude or abusive in one culture and quite acceptable in other cultures, e.g. sitting with legs crossed or sitting in a manner that shows the sole of a shoe. In Japan it is considered impolite to say no directly to a business offer. They put it differently, by saying it is very difficult, which means no. The exchange of business cards in Japan is essential, and indicates the level of your status in your business.

Similarly, there are many different habits and ways of doing things socially that affect the making of advertisement. Eating with the fork in the right hand and the left hand kept under the table is quite common in America, whereas, in European culture, the fork should be in the left hand and the right hand holding the knife or spoon.

These non-verbal communications in different countries or different languages have a direct bearing on the marketing activity and must be taken care of. As people recognize verbal languages, they act accordingly. In a similar manner, non-verbal communication must also be recognized and understood so that there is less misinterpretation. The advertisement of the communication we want to give should be appropriate and match with the culture of the country.