CONSUMER BEHAVIOR AND MARKETING STRATEGY
by
J. Paul Peter & Jerry C. Olson
Fifth Edition
Irwin McGrawhill Companies
Copyright 1999
United States
The
Birth of the Consumer Society
Modern
consumptioncultures are a rather recent historical developmwent. According to
one analysis, the birth of the consumer society occurred in England during the
eighteenth century when several important events occurred. For one, the new
mass production technologies developed during England’s Industrial Revolution
allowed companies to produce large amounts of standardized goods at relatively
low prices. A cultural revolution occurred about the same time, without which
the Industrial Revolution would not have been successful.
During the eighteenth century, England was gradually transformed from a largely agrarian society into a more urban society. When people moved into towns, their culture changed dramatically. They developed new values, performed different types of work, and developed new lifestyles. Many people developed an increased desire for material goods, stimulated partly by new marketing strategies such as advertising. Increasingly, ordinary citizens (not hust the wealthy) became concerned with symbolic meanings of goods and felt it necessary to buy products that were fashionable and up to date. Owning such things helped satisfy the new cultural need for status distinctions that had become more relevant in the relatively anynomous urban societies where few people knew each other or their family backgrounds. Thus people began to see consumption as an acceptable way to acquire important social meanings. Finally, more people had disposable income and were willing to spend it to achieve those values.
During the eighteenth century, England was gradually transformed from a largely agrarian society into a more urban society. When people moved into towns, their culture changed dramatically. They developed new values, performed different types of work, and developed new lifestyles. Many people developed an increased desire for material goods, stimulated partly by new marketing strategies such as advertising. Increasingly, ordinary citizens (not hust the wealthy) became concerned with symbolic meanings of goods and felt it necessary to buy products that were fashionable and up to date. Owning such things helped satisfy the new cultural need for status distinctions that had become more relevant in the relatively anynomous urban societies where few people knew each other or their family backgrounds. Thus people began to see consumption as an acceptable way to acquire important social meanings. Finally, more people had disposable income and were willing to spend it to achieve those values.
These cultural changes,
combined with rapidly developing ability of industry to mass produce products
of reasonable quality at low prices, created a dramatic increase in consumption
in eigteenth century England. Esentially the same events occurred in France the
United States during the nineteenth century and the modern consumer society was
born there, too.
Sources:
Adapted
from Grant McCracken, The Making of Modern Consumption,”In culture and Consumption (Bloomington, IN: University of Indiana
Press, 1988); and Janeen A. Costa, “Toward an Understanding of Social and World
Systematic Processes in the Spread of Consumer Culture: An Anthropological Case
Study,”in Advances in Consumer Reasearch,
vol. 17 (Provo, UT: Association for Consumer Research, 1991), pp.826-32.
This brief summary of
the complex events at the beginning of the modern consumption society points to
the importance of culture in understanding consumer behavior. To develop effective
strategies, marketers need to identify important aspects of culture and
understand how they affect consumers. In this chapter we examine the topic of
culture and consider its influence on consumers, affect, cognitions and behaviors.
We also describe some important characteristics of American culture and discuss
the implications of cultural analysis for developing marketing strategies. Then
we present a model of the cultural process that shows how cultural meaning is
transferred by marketing strategies to products and how consumers then acquire those
meanings for themselves. Finally we discuss cross-cultural (international)
differences and their implications for developing global marketing strategies.
As the broadest aspect
of the macro social environment, culture has a pervasive influence on
consumers. Yet, despite increasing research attention, culture remain difficult
for marketers to understand. Dozens of definitions have confused researchers
about what “culture” is or how culture works to influence consumers.
Fortunately, recent theoritical developments help clarify the concept of
culture and how it affects people. In a broad sense, cultural meanings include
common affective reactions, typical cognitions (beliefs), and characteristic
patterns of behavior. Each society establishes its own vision of the world and
constitutes or constructs that cultural world by creating and using meanings to
represent important cultural distinctions.
Marketers should
consider several issues when analyzing culture. First, cultural meaning can be
analyzed at different levels. Often, culture is analyzed at the macro level of
an entire society or country (Canada, France, Poland, Kenya or Australia).
However, because culture is the meanings shared among a group of people (of any
size), marketers can also analyze the cultural meanings of subcultures
(African-Americans, the elderly, people who live in New England) or social
classes (middle versus working class). We discuss subcultures and social class
in Chapter 13. Marketers can even analyze the shared cultural meanings of
smaller groups such as a refrence group (people who live on thev same dormitory
floor, members of a sorority or a street gang, or a group of co-workers) or
family (people in one’s nuclear or extended family). We discuss refrence groups
and family influences in Chapter 14.
A second issue, the
concept of shared or common meaning, is critical to understanding culture.
Insection 2 we examined psychological
meaning the personal, mental representations of objects, events and
behaviors stored in the memories of individual consumers. In this chapter we
consider cultural meaning at a macro social level. A meaning is cultural if many (most) people in a social group share the
basic meaning. These cultural meanings are somewhat fuzzy in that all
people in a social group are not likely to have exactly the same meaning for
any object or activity (What is an old person, an environmentally safe product,
or a good bargain?). Fortunately, meanings only have to be “close enough” to be
treated as shared or common.
Third, cultural
meanings are created by people. Anthropolohgist often say that cultural
meanings are constructed or negotiated by people in a group through their
social interactions. The construction of
cultural meaning is more obvious at the level of smaller groups. Consider
the social meanings of clothing fads among college students what look is hip or
cool this semester? At the macro societal level, cultural institutions such as
government, religious and educational organizations and business firms also are
involved in constructing cultural meaning.
Fourth, cultural
meanings are constantly in motion and can be subject to rapid changes. In the
early days of the consumption society in eighteenth century England, for instance
the cultural changes in people’s values, perceptions, and behaviors were so
dramatic that one observer believed a kind of madness had taken over society.
Later in this chapter we examine the processes by which cultural meanings are
moved about in society, partly through marketing strategies.
A final issue is that
social groups differ in the amount of freedom people have to adopt and use
certain cultural meanings. North American and Europeans societies afford people
a great deal of freedom to select cultural meanings and use them to create a
desired self identity. In most other societies (China, India, Saudi Arabia),
people have less freedom to do so.
In the following
sections we discuss two useful perspectives for understanding cultural meaning.
Marketers can examine the content of
a culture, or marketers can treat culture as a process.
The
Content of Culture
The usual approach in
marketing is to analyze culture in terms of its major attribites or its
content. Marketers typically focus on identifying the dominant values of a
society, but culture more than values. The content of culture includes the
beliefs, attitudes, goals and values held by most people in a society, as well
as the meanings of characteristic
behaviors, rules, customs and norms that most people follow. The content of
culture also includes meanings of the significant aspects of the social and physical
environment, including the major social institutions in a society (political
parties, religions, chambers of commerce) and the typical physical objects
(products, tools, buildings) used by people in a society.
The goal of cultural
analysis is to understand the cultural meanings of these concepts from the
point of view of the consumers who create and use them. For example, many
Americans have similar affective or emotional responses to the raising of the
American flag (patriotic feelings), a 50 percent off-sale (interest or
excitement), or accidentally breaking a vase in store (anxiety or guilt).
Affective responses may vary across cultures. Many Americans and Northern
Europeans would become angry of frustrated if kept waiting for 30 minutes in a
checkout line, whereas people in other societies might not have negative
affective reaction.
Behaviors also can have
important cultural . For instance, the meaning of shaking hands when greeting
someone (welcome or friendliness) is shared by many peoples of the world,
although in some cultures people bow or kiss instead. Protesters in America or
other countries who burn the American
flag are communicating disaproval or hatred through their behaviors. Some
consumption related behaviors have a cultural meanings that is unique to
particular societies. For instance, the bargaining behaviors that are common
(and expected) among shoppers in the open market bazaars of Northern Africa
indicate a skilled and shrewed consumer. But in the United Kingdom States such
as bargaining behaviors are not appropriate for shopping in Kmart or WalMart
and would be considered naïve or rude.
Aspects of the social
environment can have rich cultural meanings. For instance, the cultural
meanings of shopping for a new sweater at a self-service discount store may be
quite different from shopping in an upscale department store with attentive
personal service from salespeople. Likewise, the physical or material
environment including the landscape, the buildings, theweather and specific
objects such as wedding rings and new cars have cultural meaning for many
consumers. All societies have certain objects that symbolize key cultural
meanings. Consider the shared meanings that many Americans associate with the
flag, the Statue of Liberty, or the bald eagle (pride, freedom, individualism).
Finally, marketing
strategies may have shared cultural meanings. Peoples reactions to advertising,
for instance, tend to be culturally specific. In the United States many
advertising appeals are straightforward and direct, but consumers in other
societies many consider such appeals blunt and even offensive. Foreigners
consider many U.S. ads to be overly emtional, even schmaltzy. Thus, a McDonald’s
ad that featured a young man with Down’s syndrome who found a job and happiness
at McDonald’s was a tearjerker for Americans but was booed and jeered at the
International Advertising Film Festival in Cannes. The British tend to be
embarrased by a direct sell; their ads are noted for self-depreciating humor.
In contrast, the French rarely use humor but prefer stylish and rather indirect
appeals, which Americans may find surealistic. For example, the best French ad
in 1991 (also shown in North America) showed a lion and a tawny haired woman
crawling up opposite sides of a mountain; at the peak the woman outroars the
lion for a bottle of Perrier. Most Japanese consumers prefer ads in which
affective mood and emotional tone are emphasized over facts. Although some
Japanese ads travel well to other cultures, many are not understood outside
Japan. As a final example, marketing strategies such as pricing or distribution
have cultural meanings that can differ across societies. Many U.S. consumers
have positive reactions to frequent sales promotions such as discounting,
sales, coupons, but consumers in other cultures may have more negative meanings
(Is something wrong with this product?)
In sum, marketers need
to understand the cultural meanings of their products and brands. For instance,
an analysis of beverage products; milk, for example, is seen as weak and
appropriate for younger people, whereas wine is considered to be sophisticated
and for mature adults. As we will see later, consumers seek to acquire certain
cultural meanings in products and use them to create a desireable personal
identity.
Measuring
the Content of Culture
Marketers have used
many procedures to measure cultural content including content analysis, ethnographic
fieldwork, and measures of values. Some of these methods are different from the
more additional approaches common in consumer research (surveys, telephone
interviews, focus groups). Although all these techniques identify important
meanings shared by people, they do not show how consumers perceive products to
be related to these meanings. Means end chains are useful for that purpose.
Content
Analysis
The content of cultures
can often be read from the material objects produced by the social groups. For
instance, consumer researchers have examined comic books to gain insights into
the dominant values in a culture. Other researchers have examined a historical
record of print advertisements to see how American values and women’s roles
have changed during the past 90 years.
Ethnographic
Fieldwork
Marketers have began to
use ethnographic methods (adapted from anthropology) to study culture. These
procedures involve detailed and proleuged observation of consumers emotional
responses, cogntions and behaviors during their ordinary daily lives. Based on
this rich and detailed data, researchers interpret or infer the values and the
key meanings of the culture. Unlike anthropologists who might live in their
observations more quickly. Using a combination of direct observations,
interviews and video and audio recordings, researchers have examined consumer
behavior at flea markets and swap meets. To understand what brands and product
kids were using. Mattel (the toy company) once commisioned a global study in a
dozens countries, including the United States and China, in which it recoireded
everything kids had hanging on their bedroom walls.
Measures
of Values
Marketers also use
procedures to directly measure the dominant cultural values in a society. A
popular approach is the Rokech Value Survey in which consumers rank order 36
general values in terms of their importance. Kahle’s List of Values asks
consumers to rank order nine person oriented values. Marketers can then use
these data to segment consumers in terms of their dominant value orientation.
Various commercial techniques regularly survey large, representative samples of consumers in the United States and Europe. For instance, the Yankelovich MONITOR tracks over 50 social trends (and value changes) and reports on their significance for consumer marketing (see http://www.yankelovich.com/monitor/). Recent Yankelovich surveys showed that U.S. consumers ranked the value of privacy as their number two concerns, right behind safety. Levelor, manufacturer of window blinds, adressed this consumer value by developing the UltraDark blind with superior light control that provides exceptional privacy. Another commercial method called VALS (Values and Lifestyles) identifies segments of consumers with different sets of ends values. VALS has been widely adapted by advertising agencies to help them better understand their target customers.
The Core Values of American Culture
A typical marketing analysis of cultural content begins by identifying the core values of the social group. Core values are the abstract end goals that people strive to achieve in their lives. Knowing the core values held by people in a society can help achieve in their lives. Knowing the core values held by people in a society can help marketers understand the basis for the customer-products relationship for those consumers. For instance, many Americans value mastery and being in control of their lives and the environment. The fascination with lawns (control of nature), remote controls (control over TV exposure) and time management systems (control over time) seen to reflect this value . This value persists even though most people realize that some things (nature) cannot be closely managed and controlled. Exhibit 12.1 presents several basic core values that are shared by many Americans.
Changing Values in America
The constant changes in American cultural values can affect the success of a company’s marketing strategies. As consumers values change, their means end connections with existing products and brands also change, which can change the important consumer product relationship.
Exhibit 12.1
Core Values in America
Source:
Leon
G. Schiffman and Leslie Lazar Kanuk, Consumer
Behavior, 4th ed.,pp.424. copyright 1991. Reprinted by permission of
Prentice-Hall, Englewood Cliffs, NJ.
Various commercial techniques regularly survey large, representative samples of consumers in the United States and Europe. For instance, the Yankelovich MONITOR tracks over 50 social trends (and value changes) and reports on their significance for consumer marketing (see http://www.yankelovich.com/monitor/). Recent Yankelovich surveys showed that U.S. consumers ranked the value of privacy as their number two concerns, right behind safety. Levelor, manufacturer of window blinds, adressed this consumer value by developing the UltraDark blind with superior light control that provides exceptional privacy. Another commercial method called VALS (Values and Lifestyles) identifies segments of consumers with different sets of ends values. VALS has been widely adapted by advertising agencies to help them better understand their target customers.
The Core Values of American Culture
A typical marketing analysis of cultural content begins by identifying the core values of the social group. Core values are the abstract end goals that people strive to achieve in their lives. Knowing the core values held by people in a society can help achieve in their lives. Knowing the core values held by people in a society can help marketers understand the basis for the customer-products relationship for those consumers. For instance, many Americans value mastery and being in control of their lives and the environment. The fascination with lawns (control of nature), remote controls (control over TV exposure) and time management systems (control over time) seen to reflect this value . This value persists even though most people realize that some things (nature) cannot be closely managed and controlled. Exhibit 12.1 presents several basic core values that are shared by many Americans.
Changing Values in America
The constant changes in American cultural values can affect the success of a company’s marketing strategies. As consumers values change, their means end connections with existing products and brands also change, which can change the important consumer product relationship.
Exhibit 12.1
Core Values in America
Value
|
General
Feature
|
Relevance to
Consumer Behavior
|
Achievement
and success
|
Hard
work is good; success flow from hardwork
|
Ads
as a justification for acquisition of goods (“You deserve it”)
|
Activity
|
Keeping
busy is healthy and natural
|
`Stimulates
interest in products that save time and enhance leisure time activities
|
Efficiency
and practicality
|
Admiration
of things that scive problems (e.g., save time and effort)
|
Stimulates
purchase of products that function well and save time.
|
Progress
|
People
can improve themselves; tomorrow should be better
|
Stimulates
desire for new products that fulfill unsatisfied needs; acceptance of
products that claim to be new or improved
|
Material
Comfort
|
“The
good life”
|
Fosters
acceptance of convinience and luxury products that make life more enjoyable
|
Individualism
|
Being
one’s self (e.g., self reliance, self interest and self esteem)
|
Stimulates
acceptance of customized of unique products that enable a person to express
in his or her own personality
|
Freedom
|
Freedom
of choice
|
Fosters
interest in wide product lines and differentiated products.
|
External
conformity
|
Uniformity
observable behavior; desire to be accepted
|
Stimulates
interest products that are used or owned by others in the same social group
|
Flumanitarianism
|
Caring
for others, particularly the underdog
|
Stimulates
petronage of firms that compete with market leaders
|
Youthfulness
|
A
state of mind that stresses being young at heart or appearing young
|
Stimulates
acceptance of products that provide the illusion of maintaining or fostering
youth
|
Fitness
and health
|
Caring
about one’s body, including the desire to be physically fit and healthy
|
Stimulates
acceptance of food products, activities and equipment perceived to maintain
or increase physical fitness
|
Changes in values can
create problems (as well as opportunities) for marketers. For instance, BMW was
probably the ultimate yuppie (young urban professional) status symbol in the
1980s, but sales dropped as the economy cooled in the 1990s and people’s perceptions
of the BMW image changed. After consumption excesses of the 1980s and people’s
perceptions of the BMW image changed. After the consumption excesses of the
1980s, many consumers had become less materialistic and more concerned about
social issues such as protection of the environment. By the mid 1990s, people’s
values about luxury had shifted again and sales of BMW, Mercedes and Porsche
were up sharply. Highlight 12.1 presents examples of corporate responses to
changing environmental values.
Changes in cultural
values can create new marketing opportunities, too. For instance, chicken
restaurants saw significant growth as American consumers turned away from
burgers to products seen as more healthful. Increasing health values have led
many restaurants to add new “healthy or heart conscious” items (with reduced
levels of fat, sugar, and cholesterol) to their menus.
Changes in cultural
values are usually accompanied by charges in behavior. For instance, the values
of conviniemnce and saving time led to increases in home shopping behaviors,
including use of mail catalogs, TV shopping channels and Internet shopping.
Marketers often talk about behavior in terms of lifestyles typical ways in
which people live their lives to achieve important end goals or values. Exhibit
12.2 lists several important lifestyle trends in American sociaty along with an
example of how each many impact marketing strategies. Marketers should monitor
these cultural changes and adjust their marketing strategies as necessary.
Highlight
12.1
Environmental
Concerns A Growing Cultural Value
Many companies have
recorded to consumers growing environmental values. Many trend watchers
think the 1980s will be the decade of
environmentalism, and environmental concern will become an important value for
consumers all around the world. Some claim environmentalism is “absolutely the
most important issues for business.” Among the companies that are reacting are
the following:
·
Procter & Gamble and many other
marketers are trying to cast their products in an environmentally friendly
light by using recycled materials for packaging and formulating some products
to reduce pollution.
·
Wal-Mart has asked all its suppliers for
more recycled or recyclable products, which it then features prominently with
in store signs.
·
Du Pont has stated a “zero pollution”
goal. Among other initiatives, the company is getting out of a $750 million per
year business in chlorofluorocarbons, which damage the earth’s ozone layer and
has spent nearly $200 million developing a sale alternative.
·
McDonalds is worlding to cut the huge
waste stream produced at its 8,500 U.S. restaurants each day. For instance, it
requires suppliers to use corrugated boxes containing at least 35 percent
recycled materials. McDonald’s has tested a variety of things including
reusable salad lids, nonplastic utensils, pump style containers and refillable
coffee mugs.
The growing
environmental concern of consumers creates not just problems for companies but
also opportunities. Big business is forecast for companies in recycling.
Pollution control technology and pollution cleanup. Consider the opportunity to
design environmentally friendly packaging for compact disks. CDs now come in a
plastic “jewel box” inside a long cardboard box. Originally the long box was
developed to discourage shoplifting and to fit into existing record racks in
stores. Besides requiring near gorilla strength to open, the discarded
cardboard creates over 23 million pounds of garbage per year.
Sources:
Frank
Edward Allen, “McDonald’s Launches Plan to Cut Waste,” The Wall Street Journal, April 17, 1991, pp. B1, B4; MegCox, “Music
Firms Try Out ‘Green’ CD Boxes,” The Wall
Street Journal, July 25, 1991, p. B1; and David Kirkpatrick, “Environmentalism:
The New Crussade, “Fortune, February
12, 1990, pp.44-55.
Culture
as a Process
Understanding the
content of culture is useful for designing effective marketing strategies, but
we can also think about culture as a process. Exhibit 12.3 presents a model
of the cultural process in a highly developed consumer sociaty. The model shows
that cultural meaning is prsent in three “locations” in the social and physical
environments, in products and services and in individual consumers. The cultural
process describes how this cultural
meaning is moved about or transferred between these locations by the
actions of organizations (business, government, religion, education) and by
individuals in the society. First, marketing strategies are designed to move
cultural meanings from the physical and social environments into products and
services in an attempt to make them attractive to consumers. Second, consumers
actively seek to acquire these cultural meanings in products in order to
establish a desirable personal identity or self-concept.
Exhibit
12.2
Lifestyle
Trends in America
Trends
|
Impact on
Marketing Strategies
|
Control
of time
|
Americans
increasingly value their time and seek greater control of its use.
|
Component
lifestyles
|
Consumer
behavior is becoming more individualistic because the wider array of available
choices.
|
Culture
of convenience
|
With
the rising number of two income
house-holds, consumers are spending more on services to have more free
time for themselves.
|
Growth
of home shopping
|
Consumers
want more time for themselves and are frustrated by waiting in checkout
lines.
|
Shopping
habits of the sexes to converge
|
Men
continue to do more of the shopping and working women take on many male
shopping habits.
|
Home
entertainment
|
The
VCR is the force behind the boom in home entertainment, which will bring
about increased purchases of take out food and changes in the nature of home
furnishings and appliances.
|
Casual
dress
|
There
has been a widespread interest in more casual fashions
|
Spread
of the diversied diet
|
Americans
are eating differently (e.g., lower beef
consumption, greater fish consumption)
|
Self
imposed prohibition of alcohol
|
The
trend has been toward “lighter” drinks (e.g., vodka, “lite” beer) as well as
decline in the overall consumption of alcohol.
|
Lightest
drink of all water
|
Bottled
or sparkling water is considered by some to be chic, some individuals are
concerned about the quality of their tap water.
|
Bifurcation
of product markets
|
There
is a growing distance between upscale and downscale markets, and companies
caught in the middle may fare poorly.
|
Product
and service quality more important, if not everything
|
Products
falling below acceptable quality standards will be treated mercilessly.
|
Heightened importance of visuals in advertising and
marketing
|
With
the VCR revolution, the imperative for advitisers is to make the message
seen, not heard.
|
Fragmentation
of media marketers
|
New
sources of programming will emerge as loyalty to network TV fades.
|
Return
of the family
|
The
family will be seen as something to join as the baby boom generation rears
its children.
|
New
employee benefits for two income families
|
More
employers will offer flexible work hours, job sharing and day care services,
|
Growing
appeal of work at home
|
Workers
will want to work at home on their own computers.
|
Older
Americans the next entrepreneurs
|
Older
people want to work past the traditional retirement age and have the
resources to invest in their own business.
|
Young
American a new kind of conservative
|
Although
18-29 years olds are socially liberal, they are economically and politically
conservative.
|
Public
relations tough times ahead for business
|
Business
does not receive the credit it deserves for the creation of new jobs because
people remain suspicious about how business operates.
|
Sources:
Adapted
from “31 Major Trends Shaping the Future of American Business, “The Public Pulse 2, no.1.
Exhibit
12.3
A
Model of the Cultural Process
Cultural meaning in social and
physical environment
|
Marketing Strategies
|
Fashion System
|
Other
Institutions
|
Cultural
meaning in products and services
|
Acquistion
Posession Exchange Grooming
|
Rituals
|
Nurturing
Personalization Divestment
|
Cultural
meaning in consumers
|
Social
interactions
|
Intentional
actions
|
Sources:
Adapted
from Grant McCracken, “Culture and Consumption ‘A Theoritical Account of the
Structure and Movement of the Cultural Meaning of Consumer Goods, “ Journal of Consumer Research, June 1986,
pp.71-84.
Moving
Cultural Meanings into Products
Advertising has been
the most closely studied method of transferring cultural meaning from the
physical and social environments into products. From a cultural process
perspective, advertising can be seen as a funnel through which cultural meaning
is poured into consumer goods. Essentially, advertisers must decide what cultural
meanings they want their products to have, and then create ads that
communicatea those cultural meanings, often using symbols (whether words or
images) to stand for the desired culturam meanings.
A symbol is something (a word, image, or object) that stands for or
signifies something else (the desired cultural meaning). For instance, to
communicate cool, refreshing, summertime meanings, Nestlea Nestea showed a
person failing, fully clothed, into a cool swimming pool. The long-running “Heartbeat
of America” campaign for Chevrolet showed various symbols of small town
American life to represent traditional American values such as simplicity,
family, patriotism, and friendship. Some animals have distinctive symbolic
meanings that marketers can associate with products (the bull in Merrill Lynch
ads, the bald eagle in ads for the U.S. Postal Service’s Express Mail service,
the ram for Dodge “ram tough” trucks). Names can convey cultural meaning that
enhances the value of the product. For instance, Urban Decay, marketer of funky
nail polishes, uses such names for its colors as Oil Slick, Gash, Uzi, Rust,
and Pallor. Highlight 12.2 describes another cultural symbol used in
advertising.
Although advertising
may be the most obvious marketing mechanism for moving meanings into products,
others aspects of marketing strategy are involved as well. Consider pricing
strategies. discount stores such as Kmart and Wal-Mart use low prices establish
the meaning of their stores. For many consumers, high prices have desirable
cultural meanings that can be transferred to certain products (Mercedez Benz
cars, Rolex watches, Chivas Regal Scotch, European clothing designers) to
create a luxurious, high status, high quality image. Different price endings
($14.87 versus $14.99 versus $15.00) also may communicate specific cultural
meanings.
Japanese automobile
companies intentionally design the product attributes of their cars to
communicate cultural meanings. For instance, the design of the automobile
interior (leather versus cloth seats, analog versus digital gauges, wood versus
plastic dash) as well as the locations of the controls and how they look and
feel when one operates them can transfer cultural meanings. For instance, the
design of the automobile interior (leather versus cloth seats, analog versus
digital gauges, wood versus plastic dash) as well as the locations of the
controls and how they look and feel when one operates them can transfer
cultural meaning to the product. Even distribution strategies can influence the
transfer of meaning. The nlimited distribution of Burberry trench coats and
related products in better clothing stores enhances their image.
Other factors besides
marketing strategies can influence the transfer of meaning from the cultural
world into products. For instance, journalists who report the results of
product tests of cars, stereo systems, or ski equipment are moving meaning into
the products. The so called fashion system, including designers, reporters,
opinion leaders and celebrities, transfher fashion related meanings into clothing,
cooking, and home furnishing products. Consumer advocates such as Ralph Nader
(who convinced people that the Chevrolet Corvair was unsafe) or governmental
agencies such as the Consumer Product Safety Commission (which required warning
labels tellingt people not to step on the top level of a stepladder) are
involved in transferring meanings to products.
Cultural
Meanings in Products
Products, stores, and
brands express cultural or symbolic meaning. For instance, certain brands have
meanings concerning the sex and age groups for which they are appropriate
Virginia Slims are for women, Camels re for men; Rollerblades and T-shirts are
for young people, gardening tools and laxatives are for older people. Some
products embody cultural meanings, such as the Cooperstown Collection of high
quality reproductions of baseball team jerseys, jackets and hats, including
defunct teams such as the Washington Senators. Buying and using such products
make their cultural meanings tangible and visible and communicate those
meanings to others.
The cultural meanings
of products are likely to vary across different societies. For instance, most
societies have favorite foods that represent important meanings in that
culture, but not in others the Danes love eel, Mexicans love chilies, Irish
love Guinness, French love cheese, Americans love hamurgers.
Of course not all
people in a social group perceive a product, brand, or activity to have the
same cultural meaning. For example, some teenagers might begin to smoke
Marlboros to gain the positive cultural meanings they perceive to be contained
in the act of smoking and in the brand. Other teens might reject smoking to
avoid gaining the negative meanings they perceive in the action.
Some of the cultural
meanings in products are obvious to anyone who is familiar with that culture,
but other meanings are hidden. Nearly everyone can recognize the basic cultural
meanings in different styles of clothing (jeans and a sweatshirt versus a
business suit), makes of automobiles (Mercedes-Benz versus Ford versus Honda),
types of stores (J.C. Penney versus Wal-Mart versus Nordstrom or Saks). But
other, less obvious cultural meanings in products may not be fully recogtnized
by consumers or marketers. For instance, you might not realize the important
meanings of the missing possessions.
Many companies do not
know much about the symbolic cultural meanings of their products. This was the
case 1985 when the Coca-Cola Company changed the taste attributes of Coca-Cola
to make it slightly sweeter with less of a bite. When it introduced new Coke,
the company was surprised by an immediate flurry of protests from customers.
Millions of consumers had consumed Coca-Cola Company changed the taste
attributes of Coca-Cola to make it slightly sweeter with less of a bite. When
it introduced new Coke, the company was surprised by an immediate flurry of
protests from customers. Millions of consumers had consumede Coca-Cola as kids
and had strong cultural meanings for (and emotional ties to) the original
product. These consumers resented its removal from the marketplace and some of
them bought lawsuits againist the company. In response, Coca-Cola Classic. (The
Marketing Strategy in Action in Chapter 6 reviews this situation.)
Finally, many products
contain personal marketing in
addition to cultural meanings. Personal meanings are moved into products by the
actions of individual consumers. Although these meanings tend to be
idiosyncratic and unique to each consumer, they are important as aq source of
intrinsic self-relevance that can affect consumers involvement with the
product.
Moving
Meanings from Products into Consumers
The cultural process
model identifies rituals as ways of moving meanings from the product to the
consumer. Rituals are symbolic actions performed by consumers to create,
affirm, evoke, or revise certain cultural meanings. For instance, the consumptionrituals
performed on Thanksgiving Day by American families who feast on turkey and all
the trimmings affirm their ability to provide abundantly for their needs.
Not all rituals are formal
ceremonies such as a special dinner, a graduation, or a wedding. Rather, many
rituals are common aspects of everyday life, although people usually do not
recognize their behavior as ritualistic. Consumer researchers have begun to
investigate the role of rituals in consumer behavior, but our knowledge is
still limited. We discuss five consumption related rituals involved in the
movement of meaning between product and consumer the actions associated with
acquisition, posession, exchange, grooming and divestment. Future research is
likely to reveal other ritualistic behaviors that consumers perform to obtain
cultural meanings in products.
Acquisition
Rituals Some of the cultural meanings in products are
transferred to consumers through the simple acquisition rituals of purchasing
and consuming the product. For instance, buying and eating an ice cream cone is
necessary to receive the meanings the product contains (fun, relaxation, a
reward for hard work, a treat or pick me up). Other acquisition behaviors have
ritualistic qualities that are important for meaning transfer. For example,
collectors who are interested in possessing scarce or unique products
(antiques, stamps or coins, beer cans and so on) may perform special search
rituals when they go out “the hunt,” including wearing special lucky clothes.
The bargaining rituals
involved in negotiating the price of an automobile, stereo system, or some
object at a garage sale can help transfer important meanings to the buyer (I
got a good deal). Consider how an avid plate collector in his early sixties
describes the meanings conveyed by bidding rituals at an auction or a flea
market.
There’s no Alcoholics
Anynomous for collectors. You just get bit by the bug and that’s it. The beauty
and craftsmanship of some these things are amazing. They were made by people
who cared. There’s nothing like getting ahold of them for yourself. Especially,
if you get it for a song and you sing it your self. Its not getting a great
deal, its knowing that you ve’ got a great deal that makes for the thrill. It’s
even better if you had to bid againist someone for it.
In sum, the acquisition
rituals performed in obtaining products (purchase, search, bargaining, bidding)
can help move meanings to the buyer.
Possession
Rituals Possession rituals help consumers acquire the
meanings in products. For instance, the new owners of a house (or apartment)
might invite freiends and relativrees to a housewarming party to admire their
dwelling and formally establish its meanings. Many consumers perform similar
ritualistic displays of a new purchase (a car, clothing, stereo system) to show
off the new possession, solicit the admiration of their friends and gain
reassurance that they made a good purchase.
Other possession
rituals involve moving personal meaning from the customer into the product. For
instance, product nurturing rituals put
personal meaning into the product (washing your car each Saturday; organizing
your record or CD collection; tuning your bicycle; working in your garden).
Lather, these meanings can be moved back to the consumer, where they are
experienced and enjoyed as satisfaction or pride. These possession rituals help
create strong , involving relationships between products and consumers.
Personalizing rituals
serve a similar function. Many people who buy a used car or a previously owned
house perform ritualistic actions to remove meanings left over from the
previous owner and move new meanings of their own into the product. For
instance, consumers will purchase special accessories for their new or used
cars to personalize them (new floor mats, better radio, different wheels and/or
tires, custom stripes). Repainting, wallpapering, or installing carpeting are
rituals that personalize a house to “make it your own.”
Highlight
12.3
Grooming
Rituals
A recent study
attempted to measure the symbolic, and perhaps largely unconscious, meanings
associated with consumers personal grooming rituals. This research found that
hair care activities dominated the grooming behavior or the young adults (18 to
25 years old) in the sample. For instance, most of these consumers shampooed
their hair nearly every day, and many felt frustrated and emotional about this
activity. For instance, one year old woman said, “Fixing my hair is the most
difficult. I spend hours actually hours doing my hair. It drives me crazy!”
Because many of the
meanings associated with hair care were thought to be relatively unconscious,
direct questioning could not be used to tap into these deeper, more symbolic
meanings; consumers might just offer rationalizations for their behavior. So
the researcher showed male and female consumers pictures of a young man using a
blow dryer and a young woman in curlers applying makeup. Each consumer was
asked to write a detailed history about the person in the picture. Their
stories give some indights into the meanings of these grooming rituals.
For many consumers,
hair grooming with the blow dryer seemed to symbolize an active, take charge
personality who is preparing to go on the “social prowl.” For example, one 20
year old main said,”Jim is supposed to stay home and study to night, but he’s
getting ready to go out, anyway. He’s hoping to meet some hot chicks and he
wants his hair to look just right.”
Symbolic meanings about
work and success were prominent in other stories, as the following excerpt from a 21 year old woman’s story illustrates:
“Susan is getting ready for her first presentation, and she’s very nerveous. If
it goes well, maybe her boss will help with a down payment on a new car.”
Uncovering consumers
deep, symbolic meanings for certain products can be quite difficult. However,
the knowledge may give marketers useful insights into consumers reactions to
their strategies.
Source:
Adapted
with permission from Dennis W. Rook,”The Ritual Dimension of Consumer Behavior,”
Journal of Consumer Reasearch, December
1985, pp.251-64.
Exchange
Rituals Certain meanings can be transferred to consumers
through exchange rituals such as
giving gifts. For instance, giving wine or flowers to your host or hostess on
arriving at a formal dinner party is a ritual that transfers cultural meanings
(thanks, graciousness, generosity).
People often select
gifts for anniversaries, birthdays, or special holidays such as Christmast that
contain special cultural meanings to be transferred to the receiver. For
instance, giving a nice watch, luggage, or a new car to a college graduate
might be intended to convey cultural meanings of achievement, adult status, or independence.
Parents oftenh give gifts to their children that are intended to transfer very
particular cultural meanings (a puppy represents responsibility; a bike
represents freedom; a computer conveys the importance of learning and mastery).
Grooming
Rituals Certain cultural meanings are perishable in that
they tend to fade over time. For instance, personal care products such as
shampoo, mouthwash and deodorants and beauty products (cosmetics, skin care)
contain a variety of cultural meanings (attractive, sexy, confident, influence
over others). But when transferred to consumers through use, these meanings are
not permanent. Such meanings must be continually renewed by drawing them out of
a product each time it is used. Grooming
rituals involve particular ways of using personal care and beauty products
that coax these cultural meanings out of the product and transfer them to the
consumer. Many people engage in rather elaborate groomking rituals to obtain
these meanings (see Highlight 12.3). What types of grooming rituals do you
perform getting ready to go out?
Divestment
Rituals Consumers perform divestment rituals to remove meaning from products. Certain product
(items of clothing, a house, a car or motorcycle, a favorite piece of sports
equipment) can contain considerable amounts of personal meaning. These meanings
may be the basis for a strong customer product relationship. For instance,
products can acquire such personal meaning through long periods of use or
because they symbolize important meanings (a chair might be a family heirloom).
Often consumers believe
that some of the personal meanings must be removed before such products can be
sold or even thrown away. Thus, for instance, a consumer may wash or dry clean
a favorite item of clothing that she or he plans to give away or donate to
charity to remove some of the personal meanings in the product. A consumer
might remove certain highly personal parts of a house (a special chandelier),
car (a special radio), or motorcycle (a custom seat) before selling it.
In certain cases the
personnal meaning in the product is so great the consumer cannot part with the
object. Thus, people hang onto old cars, clothes, or furniture that have
sentimented personal meaning. One study found that certain consumers had become
highly attached to their Levi’s jeans and kept them for years, some as much as
20 or 30 years. These consumers associated many salient meanings with Levi’s
jeans, including the confidence they felt when wearing the product and the
feeling that Levi’s were appropriate in many social situations. Other consumers
talked as if their Levi’s were an old friend and companion who had accompanied the consumer on
many adventures, and the jeans were valued for the memories they contained. If
divestment rituals are unable to remove these meanings, consumers may keep such
objects forever or at least until the personal meanings have faded and become
less intense.
Cultural
Meanings in Consumers
Consumers buy products
as a way to acquire cultural meanings to use in establishing their self
identities. Consider the sports fan who buys a team bat or jacket. Major League
Baseball Properties, a licencsing and marketing organization, sells authentic
jerseys from the New York Yankees (about $175) and the 1919 Chicago Black Sox
($245) to middle aged fans who want to identify with their favorite teams,
present and past. Or consumers might buy Ben and Jerry’s Rain Forest Crunch ice
cream (made from nuts grown in the Amazon rain forest) or Tide detergent sold
in packages made from recycled materials to acquire the ecological values represented
by these products. People buy such products to move important culotural
meanings into themselves and to communicate these meanings to others.
Americans have a lot of
freedom to create different selves though their choices of lifestyle,
environments and products. Self-construction activity is especially intense
during the teenage young and young adult years. Young people try different
social roles and self-identities and often purchase products to gain meanings
related to these roles. Thus, teenage rebellions against parents values and
lifestyles usually involve the purchase and consumption of certain products. As
most people become more mature with age, their self concepts become more stable
(even rigid) and their interest in self change lessens. Of course, changes even
radical changes in self concept are still possible, but they are increasingly
rare. Even so, consumers still use the cultural meanings in products to
maintain and fine-tune their current self identities.
Although products can
transfer useful meanings to consumers, good cannot provide all the meanings
that consumers need to construct healthy self-concepts. People obtain
self-relevant meanings from many other sources including their work, family,
religious experiences and various social activities. Often the meanings gained
through these activities are more self relevant and more satisfying than those
obtained through product consumption.
Unfortunately,
especially in highly developed consumption societies, many people consume
products in an attempt to acquire important life meanings. Some of these
consumers may engage in almost pathological levels of consumption as they
desperately purchase products seeking to acquire cultural meanings with which
to construct a satisfactory self-concept. Such consumers can end up heavily in
debt and very unsatisfied.
Most people have
Favorite possession that are filled with very important, self relevant
meanings. People have high levels of involvement with such objects. Researchers
have begun to study these cherished objects to understand consumer product
relationships. For instance, elderly persons tend to feel strong attachments to
objects such as photographs or furniture that remind them of past events,
whereas younger consumers tend to value objects that allowq them to be active
in self-relevant ways (sports or hobby equipment, work-related objects such as
books or computers). Marketers need to understand these consumer-product relationships
to develop effective strategies.
Moving
Meaning to the Cultural Environment
The cultural process
model in Exhibit 12-3 shows that the meanings in consumers can be transferred
to the broad cultural environment through people’s social behavior. In a
society consisting of many individuals living and working together, culture
(shared meaning) is created by the actions of those people. Much of the
movement of meaning to the cultural environment is an automatic consequence of
the daily social interactions among people. Sometimes, however, people
intentionally try to create new cultural meanings in an attempt to change
society. For instance, various interest groups in society (punks, greens or
environmental activists, gay rights activists) try to influence others to adopt
new cultural meanings. Consumer interest groups have similar goals.
In sum, Exhibit 12.3
portrays the cultural process as a continuous
and reciprocal movement of meaning between the overall cultural
environment, organizations and individuals in the society. As with the Wheel of
Consumer Analysis, the influences are bidirectional in that the meanings can
flow in both directions.
Marketing
Implications
Managing
Cultural Meaning The cultural process model suggests that
a basic marketing task is the management of the cultural meaning of the brand
or product. The shared cultural meanings of a brand are large part of its
economic value or its brand equity.
Managing brand meanings requires that marketers identify the brand meanings
shared by consumers and monitor changes in those meanings. Means end analysis
would be useful for this purpose. Marketing strategies might be directed a
maintaining positive brand meanings or creating new meanings. These strategies
would have to select appropriate meanings from the cultural environment and
move transfer them into products and brands.
Although marketers
usually think cultural meanings are fixed or static and are not affected much
by a company’s actions, marketing strategies
do influence the overall cultural environment. A conspicious example is
the proliferation of marketing stimuli in the physical environment (signs,
billboard, ads, stores, advertisements). Less obvious is how the huge volume of
marketing strategies affects our social environment and the shared meanings of
modern life.
Using Celebrity
Endorsers in Ads a popular advertising strategy in North America and Japan for
moving cultural meanings into products and brands is to have celebrities
endorse the product. Among the celebrities who appeared in ads in the early
1990s were musician Ray Charles (Pepsi), Cher and the ballet dancer Mikhail
Baryshnikov (cologne), CEOs Lee lacocca (Chrysler) and Victor Kiam (Remington
razors), singers Whitney Houston and Michael Jackson, basketball player Michael
Jordan (Nike), test pilot Chuck Yeager (car batteries), Tommy LaSorda (diet
aid) and politicians Ann Richards and Mario Cuomo (Doritos).
From a cultural
perspective, celebrities are cultural objects with specific cultural meanings.
In developing an effective celebrity endorsement strategy, marketers must be
careful to select a celebrity who has appropriate meanings consistent with the
overall marketing strategy (the intended meanings) for the product. Musicians
such as Eltohn John and Sting (for Coke) or Ray Charles (for Pepsi) have
distinctive cultural images based on their records, live performanves, and
vidio appearances, which enhance their appeal as celebrity spokespersons. Some
celebrities such as Madonna have shrewdly re-created their images (and their
cultural meaning) over time as the appeal of one set of cultural meanings
wanes. Interstingly, celebrities who have been typecast (something most actors
complain about) are more likely to have shared cultural meanings that can be
associated with a product- Sylveter Stallone, for instance. The actress Meryl
Streep, for example, may not be a desirable spokesperson because she has played
such a wide variety of roles that she does not have a clear set of cultural
meanings. Sometimes the cultutral meanings of celebrity spokespersons are
related to their credibility and expertise concerning a product. For instance,
Cher and Elizabeth Taylor promote their own perfume brands while Phil and Steve
Mahre the twin American ski racers, promote K2 skis. In other cases the
celebrity’s cultural meanings are not logically linked to the product, but the
marketer hopes the general meanings of the celebrity as a credible and
trustworthy person will help transfer important meanings of the celebrity as a
credible and trustworthy person will help transfer important meanings to the
product. Highlight 12.4 discusses some issues in using celebrities to promote
one’s products.
Marketers need to
understand more about how celebrities transfer meaning to the product. What
happens to the cultural meanings of celebrities who are disgraced (Ben Johnson
is caught using steroids, Pete Rose is Jailed for income tax evasion), fall
from public favor (an actor plays poorly in several films), retire from public life
(Larry Bird stops playing basketball, Ingmar Bergman stops making films), or
return again to fame or favor as their celebrity status is partially renewed
(Bob Dylan or Mickey Rooney)? How can marketers use such celebrities is
transferring cultural meanings to their products and brands? Do consumers gain
the meanings embodied by a celebrity merely by purchasing the endorsed brand,
or are ritualistic behaviors necessary?
Although it is popular
to criticize the North American and European fascination with celebrities as
trivial and shallow, celebrities represent important cultural meanings that
many consumers find personally relevant. By purchashing and using the product
endorsed by the celebrity, consumers can obtain some of those meanings and use
them in constructing a satisfying self-concept.
Helping
Consumers Obtain Cultural Meanings
By understanding the
role of rituals in consumer behavior; marketers can devise rituals that help
transfer important cultural meanings from products to the customer. For
instance, a rael estate firm might develop an elaborate purchase ritual,
perhaps including an exchange of gifts on the purchase occasion, to verify the
transfer of the house, along side its meanings to the buyer. Some upscale
clothing storesperform elaborate shopping and buying rituals for their affluent
customers, including being shown to private room, served coffee or wine and presented
with a selection of clothes. When dining in a fine restaurant people
participate in many rituals that transfer special meanings, including being
seated by the maitred, talking the wine steward, using various types of
silverware and glasses, eating each course separately and so on.
Highlight
12.4
Celebrity
Endorsers
Many marketers use
celebrity spokespersons to promote their products. In particular, this strategy
makes sense in the hair color category, where glamorous supermodels like Linda
Evangelista and superstars like Madonna frequently change hair color from blon
to auburn to black and back again. In 1997-98, Revlon use Cindy Crawford to
pitch its ColorStay hair color with the claim, it “won’t fade out. “Heather
Locklear, golden blond TV star, was the spokesperson for the L’Oreal and a
little attitude.” To emphasize now easy it is to change hair color, market
leader Clairol created hip and funny ads for its Nice ‘n Easy brand using
Seinfeld actress Julia Louis-Dryfus.
The market grew in
recent years as older women (and men) have taken to coloring their hair. In
1997, about half of American woman colored their hair, up from about 35 % in
1990. According to Joseph Campinell, president of Loreal Retail, “Hair color
used to be something you did when you didn’t want to look old. It was something
your mother did in the quiet of the bathroom. Now it is no big deal to color
your hair it’s a fashion statement.” Thus many marketers look for models who
have an age less appeal such as Jane Seymour (Dr. Quinn on TV) who is
sopkesperson for Clairol’s Loving Care brand, or 37 year old actress Nastassja
Kniski who promotes Excellence Crème to cover gry hair.
A danger celebrity
endorsers is that they sometimes get into trouble with the law (consider O. J.
Simpson, Mike Tyson, or Pete Rose) or otherwise have flamboyant personalities
that limit their utility for marketers (Dennis Rodman). One option is to use “dead
celebrities” by licencing names and images. A good example is Jackie Robinson,
the baseball player who broke the color barrier in national league baseball.
Now, 25 years after his death, Robinson is a celebrity endorser for Wheaties
breakfast cereal, Coca-Cola, and Nike as well as about 17 other companies that
have licensed the Robinson name to promote their products. In 1997 the U.S.
Mint created gold and silver coins with Robinson likeness.
Perhaps the “king” of
all celebrity endorsers is Michael Jordan, ace basketball player with the
Chicago Bulls. Besides his big contract with Nike to endorser Air Jordan basketball
shoes, Jordan has licensed his name to many dozens of other products, including
golf club covers, shower curtains, sleeping bags, insulated travel mugs, gift
wrap, locker bags (that makes sense), ring binders, flashlights, soap dishes,
toy rockets, bandages, comforters and so on. Do you think that is a good idea?
Source:
Anonymous,
“Popcorn Tins, Aprons, Valentines and Bandages All Look Like Mike, “ The Wall Street Journal, November 15,
1990, p.B1: Tara Parker-Pope, “Tossing Tinted Manes, Stars Heat Up Hair-Color
Wars,” The Wall Street Journal, July
22, 1997, pp. B1, B6; and Skip Wollenberg, “Jackie Robinson a Celebrity
Endorser Again, “Marketing News, April
28, 1997, pp. 1, 12.
Finally, consider the
strategies used by Nissan to create rituals for American buyers that help
transfer meanings about its. Infinity luxury car to consumers. Dealers are
supposed to gently welcome customers in Japanese style as honored guests (not
aggresively descend on the “mooches” a derogatory term for a naïve customer
used by some American car salespeople). Tea or coffee is to be offered, several
on fine Japanese china. Each Infinity dealership should have a special shoki
screened contemplation room where consumers can sit quietly with the car “meditating”
about their purchase and the consumer product relationship. These rituals help
reinforce the low pressure, relaxed meanings Nissan wants to develop about the
Infinity approach to car selling.
Cross-Cultural
Influences
Foreign markets have
become quite important for many businesses, including the U.S. film industry.
Because domestic ticket sales have been flat over the past decade (about 1 billion
tickets per year), film companies have looked to foreign markets for growth. In
1996, U.S. film studios received from 35 to 50 percent of their total revenues
from foreign markets. Thus U.S. companies are under pressure to develop films
that appeal to both U.S. and foreign consumers.
To develop strategies
that are effective in different cultures, marketers have to understand the
differences in cultural meanings in different societies. In this section we
examine cross cultural differences in meanings and consider how these cross
cultural differences among societies affect consumers. We also discuss how
marketers can treat cross-cultural differences in developing international
marketing strategies.
Cross cultural
differences do not always coincide with
nationalborders. This is obcious in many countries where cultural differences
among internal social groups are as great as between separate nations.Consider
Yugoslovia (with several regions including Slovenia, Croatia, Serbia) the
former Soviet Union (with 15 republics and many large cultural differences),
Belgium (with two language cultures Flemish and French), Canada two language
cultures English and French) and Switzerland (with German, French, Italian and
Swiss speaking regions). Understanding the cultural influences in such regions
requires an analysis of subcultures, discussed in chapter 13.
Likewise, national borders do not always demarcate clear cross-cultural differences. For instance, many people living on either side of the long Canadian US. Border share similar cultural characteristics (French speaking Quebec is an exception). Likewise, the people in southern Austria and northern Italy or northern France and southern Belgium share many similarities.
Likewise, national borders do not always demarcate clear cross-cultural differences. For instance, many people living on either side of the long Canadian US. Border share similar cultural characteristics (French speaking Quebec is an exception). Likewise, the people in southern Austria and northern Italy or northern France and southern Belgium share many similarities.
Cross
Cultural Differences
Marketers must consider
cross-cultural differences when developing marketing strategies for foreign
markets. We discuss a few of these here.
Differences
in Consumption Culture
The level of
consumption orientation in different markets is an important cross-cultural
factor that companies should consider when developing international marketing
strategies. The opening example pointed out that a large part of U.S. culture
involves consumption activities. Many other areas of the world including
Canada, most Western European countries and Japan also have strong consumer
cultures. Even in relatively poor countries, significant segments of society
may have a developing consumer culture. For instance, India, Mexico and many
South American countries have a large middle class of consumers that can
consume at significant levels. The Asian countries of the so called Pacific Rim
have a rapidly growing middle class with substantial spending power.
In much of the world,
however people have less opportunity to participate in a consumption culture.
For instance, the ordinary citizens of many Eastern European countries, the
former Soviet Union, China, India and most Third World countries do not have
sufficient purchasing power to consume at high levels, nor are these societies
able to produce goods in sufficient number and variety to meet the consumption
needs of their people.
Self
Concept
People in different
cultures may have stringly different concepts of themselves and how they should
relate to other people. Consider the differences between the vision of an
independent self typical in North America and Western Europe and the concept of
self as highly interrelated with others that is more common in Japan, India,
America, and even some southern European cultures.
Americans with their
strong individualistic orientation, tend to think of self in terms of personal
abilities and traits that enable people to achieve the ideals of independence
from others, freedom of choice and personal achievement. In contrast, the
Japanese tend to value a self that is sensitive to the needs of others, fits
into the group and contributes positively to the harmonious interdependence of
the group members. These cross-cultural differences in self concept are likely
to affect how people in those cultures interpret prduct meanings and use
products to achieve important ends in their lives. For example, Japanese gift
giving behavior is strongly affected by the socially oriented self-concept.
Especially when they
return from trips abroad, the Japanese feel a rather strong social (cultural)
obligation to bring souvenir gifts to the folks back home. This type of gift
giving is called omiyage. Friends,
parents, siblings, and relatives are the typical recipients. A quick study of omiyage among Japanese tourists at the Los
Angeles airport revealed 83 percent had bought omiyage, spending an average of $566 on such items compared to $581
on personal items. The number of persons bought for was high (by American
standards); 45 percent of Japanese tourists bought for was hight omiyage gifts for 15 or more people.
Interestingly, although nearly 80 percent of the tourists mentioned that omiyage was a strong social norm in
Japan, only 7 percent of the respondents claimed to enjoy buying omiyage. Most teated it as a necessary
chore. As for marketing strategies, it is important to know that the packaging
and wrapping of omiyage gifts has important cultural meaning, partly because gifts
are seldom opened in front of the giver. The appearance of the package is
highly valued by Japanese consumers.
The meanings of the end
values or goals found in means end research are likely to be quite different in
different cultures, as are the means to achieve them. Consider the value of
self-esteem or “satisfaction with self”. North Americans for instance, might
satisfy self esteem needs by acting in ways that represent their independence
and autonomy from the group. But for the Japanese, cooperation with a group is
an act that affirms the self. In Japan, giving in to the group is not a sign of
weakness (as it might be interpreted in North America) but rather reflects tolerance,
self-control, flexibility and maturity all aspects of a positive self image for
most Japanese, In contrast starting one’s personal position and trying to get
one’s way (acts valued in America’s as “standing up for what one believes”) may
be thought childish and weak by the Japanese.
Similar
Cross-Cultural Changes
It is becoming more
common to find similar cultural changes occuring in many societies around the
world at about the same time. For instance, the social roles for women in North
American society have changed considerably over the past 20 years. As more
women worked outside the home, their values, goals, beliefs and behaviors have
changed. Similar changes have occurred around the world. Now modern women in
America and Europe and increasingly Japan and other countries want more
egalitarian mariages. They want their husbands in share in the housework and
maturing of children and they want to establish a personal identity outside the
family unit. These common cross cultural changes have created similar marketing
opportunities in many societies (for convinience products and time savings
services).
Everywhere people want
more leisure and more free time. Even the world champion workaholics the
japanese, where up to 60 percent of workers spend Saturdays on the job, are
beginning to loosen up and relax a bit. Although the traditional Japanese
values of hard work, dedication, and respect for the established order are still
dominant, some Japanese especially among the young are starting to see certain
aspects of Western culture and lifestyles as preferable to their own. For instance,
as the Japanese become more consumption oriented and price conscious the number
of malls and discoint stores is increasing rapidly.
Materialism
Materialism
has
been defined as the importance a consumer attached to worldly possessions.
Consumers with this value tend to acquire many possession, which they see as
important for acvhieving happiness, self-esteem, or social recognition (all
prominent values in American culture). Although researchers disagree about its
exact definition, materialism is a multidimensional value including
possessiveness, envy (displeasure at someone else possessing something), and nongenerosity (unwillingness to give or
share possession). Another study points to four dimensions of materialism:
possession are symbols of success or achievement (prominent American values),
sources of pleasure; sources of happiness andrepresentations of indulgence and
luxury. Materialistic values underlie the development of a mass consumption
society, as we saw in the opening example, and in turn are stimulated by
increasing consumption opportunities.
The United States is
ussually considered to be the most materialistic culture in the world. But a
few studies suggest that Americans may not be materialistic than other European
societies. For instance, one study found that consumers in the Netherlands had
about the same level of general materialism as American consumers. But
interestingly, the Dutch consumers were more possessive tham Americans. Perhaps
it is not accidental that the Dutch have no garage sales and flea markets are
rare. Whereas U.S. consumers seem to replace old products with new ones fairly
easily, the Dutch seem to form stronger relationships with their possessions.
Marketing
Implications
Marketers must
determine which cross cultural differences are relevant to their situations. A
sensitivity to and tolerance for cross cultural differences in meaning is a
highly desirable trait for international marketing managers. Most international
companies also hire managers from the local culture because they bring an
intimate knowladge of the indigenous cultural meanings to strategic decision
making.
Apparently, a global
(standardized) marketing approach can work well for some products. However,
many marketers have severely criticized the globaal marketing approach. We believe
two issues cloud the debate between advocates of adapting versus standardizing
international marketing approaches is. For example, advocates of standardizing
recognized that Black & Decker had to modify its products to suit local
electrical outlets and voltages; yet they would argue the basic meaning and use
of such products is becoming similar across cultures. If so, the same type of
promotion campaign should work in different cultures.
Highlight
12.5
Exporting
American Popular Culture
Aspects of American
culture are becoming increasingly popular around the globe. One can find the
icons of American popular culture nearly everywhere. Consider the worldwide
presence of Coke and Pepsi, McDonald and PizzaHut, Mickey Mouse and Mickey
Rourke, cowboys and Jazz, American films and Disneyland. The spread of American
culture has produced some very incongruous television scenes of Third World
protesters (ussually young man) burning the American flag or chanring anti
American slogans while dressed in T-shirts, Nike shoes, and blue jeans.
Although some people consider American culture to be distasteful, the general
population seems to like many of its foorms. Even in Anglophobic France the
uniform of young upper-middle class Parisian women in 1990 was pure Americana
Calvin Klein jeans, a white button down oxford shirt, a navvy blazer, Bass
Weejuns penny loafers, and a Marlboro cigarette.
Consumers around the
world are not attratched to American products solely for their intrinsic
physical qualities. People don’t buy blue jeans because of some universal
aesthetic for denim, nor do Coke or Marlboros or Mickey Mouse have physical
attributes that are so special. Rather, these prototypically American products
are attractive because they are imbued with meanings that symbolize the United
States.
What are these special
American meanings? According to a Yale professor, “it’s about a dream, a
utopian fantasy. Certainly it is about freedom, the freedom of people to create
themselves anew, redefining themselves through the products that they buy and
use, the clothes they wear, the music they listen to. “Blue jeans perhaps more
than any other product, symbolize America and the individualistic meanings it
represents to many. Buying jeans is a way for consumers to share in the
American dream of individualism, personal freedom and other rather mystical
meanings associated with America.
It is important to
recognize that American culture is popular partly because it is just that a
popular culture, not an elitist culture created by and for the aristocracy in a
society. American culture is for the masses. Moreover, it is a highly democratic
culture that everyone in the society helps to shape, not just the elite
classes.
Finally American
culture lends itself to export because it is itself a combination of diverse
cultural elements brought to America by the millions of imigrants who were
tumbled together to create something new and desirable. Perhaps this explians
why members of the elite social classes in the United States and elsewhere love
to turn up their nosses at the “tawdry, cheesy, popular culture” in America.
Interestingly, a democratic culture can be threatening for the ruling elites in
many societies.
Source:
Eric
Feltan, Love It or Hate It, America Is King of Pop Culture,”Insight, March 25 1991, pp. 14-16.
Reprinted by permission from Insight.
Copyright 1991 News World Communications, Inc. All rights reserved.
Although cross-cultural
differences can be large and distinctive, there are cases in which people seem
to have rather similar values and consumer product relationships. Some analysts
see the entire world as moving toward an “Americanized” culture, although this
is a controversial idea. (Highlight 12.5 discusses some examples of the
exporting of American popular culture.) To the extent that common cultural
meanings are becoming similar across socities, marketers should be able to
develop successful strategies that are global in scope.
Developing
International Marketing Strategies
Cross-cultural
differences provide difficult challenges for international marketers. Even
something that seems simple, such as translating a brand or model name into another
language, can cause problems. When Coca-Cola was introduced in China in the
1920s, the translated meaning of the brand name was “bite the wax tadpole! “
Sales were not good, and the symbols were later changed to mean “happiness” in
the mouth. “American Motors Matador brand had problems in Puerto Rico because
matador means “killer”. Ford Motor Company changed the name of the Comet to
Caliente when it introduced this car in Mexico. The law sales levels were
understood when it was realized that caliente
is slang for streetwalker. Sunbeam Corporation introduced its
mist-producing hair curling iron in the German market under the name
Mist-Stick, which translated meant “manure wand”.
American companies are
not the only ones that have difficulty translating brand names. The Chinese had
to seek help to find better brand names for several products they hoped to
export, including “Double Happiness” bras, “Pansy” men’s underwear and “White
Elephant” batteries.
The above meanings
illustrate how cross-cultural differences in language and related meanings can
strongly affect the success of a marketing strategy. However, although
differences in cultures often be identified, marketers do not agree on how
these differences should be treated. There are at least three overall
approaches, which we discuss next. First, a firm can adapt its marketing
strategy to the characteristics of each culture. Second, a firm can standardize
its marketing strategy across a variety of cultures. Arguments over which of
these is the preferred strategy have been raging for more than 20 years in the
literature on marketing and consumer behavior. Third, a firm can use a
marketing strategy to change the culture.
Adapting
Strategy to Culture
The traditional view of
international marketing is that each local culture should be carefully
researched for important differences from the domestic market. Differences in
consumer needs, wants, preferences, attitudes and values, as well as in shopping,
purchasing and consumption behaviors, should be carefully examined. The
marketing strategy should then be tailored to fit the specific values and
behaviors of the culture.
The adaptation approach
advocates modifying the product, the promotion mix or any other aspect of
marketing strategy to appeal to local cultures. Black & Decker, for
example, has to modify its hand tools because electrical outlets and voltages
vary in different parts of the world. Philip Morris had to alter its ads for
Marlboro cigarettes in Britain because the government believed British children
are so impressed with American cowboys they might be moved to take up smoking.
Nestle modifies the taste of its Nescafe coffee and the promotions for it in
the adjoining countries of France and Switzerland to accommodate different
preferences in each nation.
Standardizing
Strategy across Cultures
This approach is often
called global marketing. It argues for marketing a product in essentially the
same way everywhere in the world. It is not a new idea Coca-Cola has used this
basic approach for over 40 years, called “one sight, one sound, one sell. ”Other
companies such as Eastman Kodak, Gillette, and Timex have marketed standard
products in essentially the same way for several decades.
Opinions of global
marketing have varied over the past decade, but many marketers are beginning to
treat the standardized approach more seriously. One of its major advocates is
Professor Theodore Levitt of Harvard Business School. Levitt argues that
because of increased world travel and worldwide telecommunications
capabilities, consumers the world over are thinking and shopping increasingly
alike. Tastes, preferences and motivations of people in different cultures are
becoming more homogeneous. Thus, a common brand name, packaging and
communication strategy can be used successfully for many products. For example,
given the international popularity of the “Dallas” TV show, actrees Victoria
Principal sells Jhirmarck shampoo all over the world. Similarly, Victor Kiam
sells his Remington shavers using the same pitch in 15 languages. Sales of
Remington shavers have gone up 60 percent in Britain and 140 percent in
Australia using this approach. Playtex markets its WoW bra in 12 countries
using the same advertising appeal.
One advantage of the
standardized approach is that it can be much less expensive in terms of
advertising and other marketing costs. Executives at Coca-Cola once estimated
that they save more than $8 million a year in the cost of thinking up new
imagery. Texas Instruments runs the same ads throughout Europe rather than
having individual ad campaigns for each country, and it estimates its savings
at $30,000 per commercial. Playtex produced standardized ads for 12 countries
for $250,000, whereas the average cost of producing a single Playtex ad for the
United States was $100,000.
Second, and perhaps
more important, is the question of whether advocates of the standardizing
approach are focusing on a long-term trend toward similarity across cultures or
are suggesting that cultures are nearly identical tosay. Unlike the deractors
of this approach, we believe that the most advocates of global marketing have
identified a long-term trend of increasing global homogenity along many, but
not necessarily all, dimensions. We also believe advocates are suggesting that
marketers should be aware of this trend and adapt to it when appropriate. Thus
in essence, both sides are arguing that marketers should adapt to cultural
trends; and there would seem to be little disagreement between the two
positions at this level.
Change
the Culture
The first approach we
discussed argues for adapting marketing strategy to local cultures. The second
approach argues that cross cultural differences are decreasing and in some
cases can be ignored. The third approach suggests that marketing strategies can
be developed to influence the culture directly. As the cultural processes model
in Exhibit 12.3 shows, marketing does not simply adapt to changing cultural
values and behaviors of consumers; marketing also is an active part of the
cultural process.
Marketing strategies
both change and are changed by culture. For example, one long run strategy may
be to attempt to change cultural values and behaviors. Some years ago, Nestle
marketed vigorously to convince mothers in some Third World countries to change
from breast feeding to using the company’s baby formula product. The campaign
was very successful in persuading mothers that breast feeding was not as
healthful for their chilfren as the company’s formula and it dramatically
changed their feediong practices. Unfortunately, because of poor water
sanitation and improper formula preparation, infant mortalities increased.
Thus, the preference for and practice of breast feeding had to be reinstilled
in those countries, which was done successfully. This company changed cultural
preferences and behaviors and then changed them back in a relatively short time.
Marketing
Implications: The European Union
Marketers in the Unites
States and elsewhere are adjusting to the European Union (EU). On January 1993,
the EU became a common market of approximately 325 million people. Originally a
union of 12 European countries, the EU has grown as countries such as Sweeden
and Austria have joined (more members are expected). Creating the EU involved
many changes, including reducing the technical barriers that have separated
countries in Europe. Customs clearances and import duties are removed so goods
and people can move freely across the borders, various regulations are
standardized (size of trucks, tax levies) and legal requirements are becoming
more similar.
Despite these changes,
the considerable cross-cultural differences among the EU countries will not
disappear. Perhaps the vision of a single European market (in terms of common
cultural meanings) is premature. Each society is likely to retain its own
language, tastes, cultural meanings, customs and rituals and probably its own
currency for some time into the future. In fact, some experts believe the
economic union may accentuate existing cross-cultural differences. (Highlight
12.6 describes cross-cultural differences. (Highlight 12.6 describes
cross-cultural differences in driving habits.) More extreme forecasts predict a
return to the Europe of “cultural regions” that existed before the nation
states of today were created. Examples of this possibility are the hostilities
in Bosnia, the disintegration of the Soviet Union and the difficulties in
integrating eastern and western Germany. Everyone agrees, through, that
marketerscannot look at Europe in the same way.
Marketing to the 113
million households in these diverse markets will take agile management. It will
be difficult to develop standardized marketing strategies to sell products in
all countries in Europe. Although some products may lend themselves to
standardized strategies, others will require careful adaptation to local cultures.
Consider the problems
faced by Sara Lee Company, a $12 billion food and consumer prodeucts company
based in Chicago, as it studies its various European markets. Sara Lee’s
European operation has a best selling herbal bath soap in Great Britain called
Radox, but it has not tried to sell it in other countries because of
connotations with the name. Some European consumers confuse Radox with the bug
killer Raid and others think of Radox as something with a half life and
unsuitable to put on your skin. A similar situation exists for Sanex, a Spanish
soap, promoted nearly everywhere in Europe but England. To the English, Sanex
comes across as “sanitary,” which connotes inappropriate meanings. The company
faces similar problems in transferring popular U.S. brands, such as Hanes, L’Eggs
and Sara Lee, to European countries. For example, L’Eggs translates to les ouefs in French, which might not work
very well.
Highlight
12.6
Cross-Cultural
Driving Habits
Although some people
still believe Europe will become once culture with the arrival economic unity,
the large and important cultural differences between the European countries
will not go away. In fact, cross-cultural differences may intensify. Nowhere
are Europe’s rich cultural differences more clearly revealed than in people
behaviors behind the wheel of a car or the handlebars of a motorbike.
Cultural stereotypes probably
have some basis in fact. The British and Japanese will wait patiently in
traffic for hours, whereas Germans may become upset if held up for even a few
minutes. In some countries it is an insult to be passed, and the polite drivers
in the United Kingdom pull over to let speedier cars by. Many French and
Italian drivers share a certain disdain for authority and the laws of the road.
Germans may be somewhat aggressive and impatient, as the stereotype goes, but
they follow the traffic rules. For instance, speed restrictions now found on
many sections of the autobahn are rather strictly followed. But once that spot
is passed, many German drivers take this to mean “go as fast as the car is
capable. ”This can surprise the sedate British driver of an old Volkswagen, who
can be very quickly overtaken by a huge Mercedez Benz traveling 130 mph.
In the safety conscious
Nordic countries, driving tests are difficult and sobriety is strictly
enforced. Drivers in Norway and Finland tend to be competent and relatively
placid. Enforcement of traffic laws is strict, with some fines contingent on
one’s income. The Swedes drive with their lights on at all times day and night,
as if anticipating the three month winter night, as if anticipating the three
month winter night. In contrast, southern Europeans seem to have a more causal
attitude toward the laws and driving speed and reflect a greater propensity to
take risks. In Greece, for instance one can be surprised by alarge truck
travelling at high speeds down the center of a narrow mountain road. The many
shrines along Greek roads give evidence of the gruesome toll.
Italian, cities offer
an exciting driving experience where aggressive jockeying for position in heavy
traffic reminds many of a Grand Prix race. In Italy, a tiny Flat 126 was
spotted speeding recklessly down a steep mountain road. Several high spirited teenagers
were actually standing out of the tiny car’s sunroof, waving wildly and
laughing. Closer inspection revealed the driver was also out of the sunroof,
standing on the dashboard and negotiating the mountain road with his bare feet
on the steering wheel.
Will the new unified
Europe create a new breed of driver with a standardized temprament? For
driving, the values of the culture concerning life and death and the macho
values associated with the male ego, seem to be the key considerations. These
and values seem likely to continue to varry considerably across European
societies.
Sources:
Tony
Lewin, “What Drives Macho Mad?” The European,
June 21 1991, p.17 (Elan section).
But Sara Lee is
developing pan European marketing strategies for some of its products. For
instance, its coffee brand, Douwe Egberts, was sold in 1989 using various brand
names in seven countries. Sara Lee standardized the products package sizes and
color to emphasize the brand name and emblem. It plans to use one standard
television commercial, to be shown everywhere in Europe, that portrays the
coffee as a congenial drink that binds families together. Sara Lee managers
hope the brand will eventually develop a true European identity.
The
Birth of the Consumer Society
The opening example
described several changes in the culture of eighteenth century England that led
to the birth of a consumer society. One fundamental change occurred as many
people moved from rural areas to larger and more anonymous urban communities.
Such a cultural change can influence various cultural meanings in a continuous,
reciprocal process much like that of the Wheel of Consumer Analysis. For
instance, the new city dwellers were concerned about their social class status.
These changes in values led to new beliefs and attitudes about products that
could communicate social distinctions, which led to changes in purchase
behavior. As more people bought these status products, the social environment
changed for all consumers, leading to further changes in values and meanings
and so on.
Other cultural changes occurred
as people’s shopping and purchasing behaviors became more frequent even daily
rather than only on the weekly market day. The shopping environment also
changed in that people could buy things in various shops rather than from
pedlers or street hawkers. The evolving consumption culture was also influenced
by marketing strategies (especially advertising and forms of social influence
such as opinion leaders).
Finally, mass
consumption increased as more people had significant discretionary income. Many
people who previously had been unable to buy many things (low purchasing power)
or were unwilling to do so (they didn’t see the need or value making fashion
oriented purchases) now become increasingly interested in consumption. These
people had developed new cultural needs, values and goals that could be
satisfied rather easily through consumption. Gradually goods of all types
became infused with symbolic meaning and people began to buy and use goods as a
way to acquire these important meanings.
Many scholars who have
identified social competition and people’s need for status differentiation as
largely responsible for the consumer revolution write as if they do not approve
of people seeking to satisfy such “unimportant” and “trivial” values. Although
status distinction was (and still is) an important end state for most people,
other cultural meanings also were desired. The cultural process of meaning
transfer is a natural process people use to obtain important meanings. The
cultural process model is not evidence of people’s inherent irrationally nor is
it applicable only to “manipulative” marketing strategies. All known cultures
imbue certain objects with special meaning and people obtain and use those
objects to gain those important cultural meanings. One difference is that
people in modern consumer societies often purchase
objects (product and services) to obtain cultural meaning.
Similar cultural
changes occurred later in America, France, and elsewhere as thoose societies
also develop consumption oriented cultures. The same events are occuring right
now around the world, including societies in Asia, South America, Africa and
Eastern Europe. A big difference, though, is that cultural changes spread much
more rapidly today because of modern communications and more sophisticated and
effective marketing strategies.
Summary
In this chapter we
examined the influences of culture and cross-cultural factors on consumers
affective responses and cognitions, behaviors and the physical and social
environment. We defined culture as the meanings shared by people in a society
(or in a social group), we discussed how marketers can study the content of
culture. We identified several important values and lifestyle trends in
American culture, and we drew some implications for marketing strategies. We
presented a model of the cultural process by which cultural meaning is moved
between different locations especially from the environment to products and on
from products to consumers. Finally, we discussed how marketers might use this
knowledge to develop effective international marketing strategies.
Key
Terms and Concepts
content of culture 269 culture 268
core values 272 European
Union (EU) 292
cross-cultural
differences 286 global
marketing 290
cultural meaning 268 materialism 288
cultural process 274 rituals 279
Review
and Discussion Questions
1. Define culture and contrast two approaches to cultural analysis: the
content of the culture versus the cultural process.
2. Identify a major change in cultural
values that seems to be occuring in your society (choose one not discussed in
the book). Discuss its likely effects on consumers affect, cognitions, and
behaviors and on the social and physical environment.
3. Select a product of your choice and
discuss two implications of your analysis in Question 2 for developing
marketing strategies for that product.
4. Briefly describe one example of a price,
product, and distribution strategy that moves cultural meaning into the product
(do not use examples cited in the text).
5. Select a print ad and analyze it as a
mechanism for moving cultural meaning into the product.
6. Choose a popular celebrity endorser and
analyze the meanings being transferred to the product endorsed.
7. Select a holiday other than Christmas
for example, Thanksgiving or Independence Day. Discuss the major cultural
values reflected in this holiday celebration. What rituals did your family
perform for this holiday and how did they move meaning?
8. Think about what you do when getting
ready to go out. Try to identify some grooming rituals you perform that involve
certain products. Try to discover how you use some particular product (blow-dryers,
cologne, shampoo). What implications might this have for marketing this
product?
9. Describe how posession rituals can
transfer meaning from products to consumers.
10.
Describe a personal experience in which
you performed a divestment ritual. What personal meanings did you remove
through the ritual?
11.
Discuss how the three main approaches to
dealing with cross cultural factors in international marketing could be applied
to the marketing of a soft drink such as Pepsi-Cola. Describe one problem with
each approach. Which do you recommend?
Marketing
Strategy in Action
McDonald’s
…All Around the World
In 1997 the more than 21,000 McDonald’s restaurants
in 109 countries around the world earned almost $32 billion. On an average day
McDonald’s opens three new restaurants, only one of which is in the United
States. Within a year the chances are good that each new McDonald’s will be
grossing over $1.5 million per year and operating at a profit. About 30 percent
of McDonalds stores are company owned; 70 percent are franchise operations.
Franchises pay McDonald’s a royalty of 4 percent of sales, about 8 percent for
rent, and 4 percent for advertising that’s 16 percent off the top to McDonald’s.
Do not feel sorry for owners of McDonald’s franchises, through. The average
owner nets $200,000 per store, with stores in high traffic locations such as
Rome or Moscow doing significantly better. Actually, the Moscow McDonalds,
which opened in 1990 just a few blocks from the Kremlin, is the busiest in the
world.
In
1994 McDonald’s had one restaurant for every 25,000 people in the United
States. It was becoming difficult to open new stores without cannibalizing
sales from an existing store. McDonald’s had developed niche locations such as
ice skating rinks, rest stops on interstate highways and small satelite stores
in big cities. Growth was much easier overseas and international markets
expanded rapidly as the company sought new opportunities. In 1988 the company’s
2,600 foreign stores produced $1.8 billion in revenue. McDonald’s derives about
50 percent of operating income from foreign operations; 50 percent come from
U.S. stores.
Managers
must decide where to locate new restaurants and how many to build. James
Cantalupo, president of McDonald’s international division, uses a simple
formula based on a country’s population and per capita income to roughly
estimate the number of stores that can be profitable in a country.
Formulation
Population of country X : Number of people per
McDonald’s in the United States (x or times with) Per capita income of country X : Per capita
income of United States = Potential penetration of McDonalds in country X.
Perhaps the 21,000
McDonald’s reataurants are enough (or already too many), but the suggests that
many more restaurants could be built. Japan for instance, was McDonald’s
biggest foreign market in 1994, with an estimated potential to support 3250.
Overall, the formula suggests that the world can handle at least 42,000
McDonald’s restaurants.
Another perspective on
this issue is gained by realizing that, each day, about 33 million customesrs
walk through the doors of McDonald’s restaurants around the globe. Despite this
volume, McDonalds serves less than 1 percent of the world’s population on any
given day. Thus even McDonald’s is the largest and best known global food
service retailer, it still has enormous potential growth in the global market.
Why is McDonald’s so
popular around the world? What does McDonald’s for granted) to appreciate what
a McDonald’s restaturant means to consumers in foreign countries. According to
Tim Fenton, head of McDonald’s in Poland, It”s hard for Americans to
undesrtand, but McDonalds is almost heaven sent to these people. It’s some of
the best food around. The service is quick and people smile. You don’t have to
pay to use the bathroom. There’s air conditioning. The place isn’t filled with
smoke. We tell you what’s in the food. And we want you to bring the kids.”
In addition, McDonald’s
contains considerable cultural meaning that many consumers value. Many people
around the world see McDonald’s as a quintessential American product, along
with Levi’s, Coke, and Marlboro. These important cultural meanings influence
consumers behavior toward McDonalds in the international marketplace.
McDonald’s walks a fine
between following a global and a local strategy. In many ways, McDonalds seems
”global”. They sell their major food products (the Quarter Pounder and Big Mac
Burgers, fries, Coke and milk shakes) nearly everywhere in a standard form.
McDonald’s goes to great length to maintain the quality and taste of its key
products (beef patties, buns and fries are uniform worldwide). They apply
unrelenting pressure on their suppliers to produce buns, meat, potatoes and
ever onions that meet particular specifications. In Germany, for example, a
spotless meat plant uses computers to ensure that 2.5 million beef patties per day have a fat content of 20
percent or less. A giant bakery near Moscow produces the famaous sesame seed
buns to McDonalds exact requirements.
Also, McDonalds works
hard to create its global vision of high quality and consistency around the
world by training its personnel. Many McDonald’s employees have received
degrees in “Hamburgerology” at McDonald’s Hamburger University, in Oax Brook, lllinois.
Providing instruction to restaurant personnel in 23 languages, HU awarded its
50,000th graduate degree in 1995.
Even though McDonald’s
stores around the world are similar in many respects, stores differ in details
of size, location and décor and all have a similar style and atmosphere. The
smiling employees and friendly, rapid service are ubiquitous. One executive
sees service as the core of what McDonald’s offers its customers. “The world is
becoming a service society. People are hungry for service, but in many
countries they don’t get any except at McDonald’s. That’s why our stores are so
crowded. That’s why we’re ahead.
Despite their global
startegy approach, McDonalds also makes many adaptations to local customs,
tastes, and norms. Details of the store décor often reflect local sensitivities
and culture. Sometimes McDonald’s must adapt to legal and regulatory constrains
on certain marketing strategies and actions. For instance, Germany does not
allow special promotions such as “buy one, get one free.”
McDonald’s sometimes
makes even more significant adaptations to local cultural tastes. For example,
menu items vary somewhat from one country to another. Favorite foods may be
featured along with hamburgers salads with chrimp in Germany, veggie, burger in
Holland, black current shakes in Poland. Beer is available in some European
countries. Japan has the Teriyaki McBurger a sausage patty on a bun with
teriyaki sauce. The Extra Value Meal is known worldwide, but in some cases
communicating that concept is difficult. For instance, the Korean language has
no phrase for Extra Value Meal, so McDonalds uses the term Alchanset, meaning “rich
in contents.” Similarly translating Quarter Pounder, an English measurement
terms, requires deft handling in countries that use the matric ssystem. In many
European and Asian McDonald’s, this worldwide favorite is known as McRoyal or
Hamburger Royal.
How can McDonald’s be
sensitive to local customs while maintaining its core service and product
quality? They learn and reflect the local culture by hiring as many locals as
possible. McDonalds employees often fly in from headquaters to help develop new
markets. But nearly, all of them go back after a period and turn the operations
over to locals with more intimate knowledge of the local culture and customers.
For example, Tim Fenton Went to Poland in 1992 with a team of 50 experts from
the United States, Russia, Great Britain and Germany By 1994, all the jobs
except Fenton’s had been taken over by Polish nationals (he to left
eventually).
In the early 1980s many
experts believed McDonald’s was too big and cumbersome to prosper in a mature
industry. McDonald’s has proved the critics wrong by successfully operating a
complex service business all around the world.
Discussion
Questions
1. Identify some of the cultural meanings
for McDonalds possessed by consumers in your country. Discuss how these
cultural meanings were developed. Discuss how these meanings influence consumer’s
behaviors (and affect and cognitions) and thus the market success of McDonalds.
What is the role of marketing strategies in creating and maintaining (or
modifying) these cultural meanings?
2. What cultural meanings do you think
consumers in other countries (such as Canada, Mexico, Germany, Spain, Russia,
Poland, Thailand, Malaysia, Australia or Japan) might have for McDonalds? What
cultural meanings are associated with a quitessential American company? Is it
an advantage for McDonald’s to be an icon of America?
3. Take the World Tour on the McDonald’s
business around the world. Discuss the differences between a global versus adaptation
strategy considering McDonald’s business around the world. Discuss the
differences between a global versus adaptation strategy considering McDonald’s
approach? Critique its current approach and make recommendations for changes.
4. Critique the formula that predicts the
market potential for McDonald’s in a country. What other considerations might
be useful to include?
Sources:
Andrew
E. Serwer, “McDonald’s Conquers the World, “Fortune,
October 17, 1994, pp. 103-16; the McDonald’s Web site at http://www.mcdonalds.com/
