Global consumer culture is a beguiling illusion and a gangerous fiction for the marketing manager - Essay Example

? “Global Consumer Culture is a beguiling illusion that completely glosses over the hard realities of national, ethnic and religious differences. It is therefore a dangerous fiction for the marketing manager to engage with.” Student’s Name Name of the University A. ABSTRACT: This paper will highlight the importance of national, cultural and religious values in context of globalization. The aim of this paper is to provide convincing arguments and logical reasoning behind the failure of globalization strategies with the help of practical examples of multi-national corporations. The paper will first elucidate the concepts of consumer culture and global consumer culture. Then it will explain the advantages which attracts marketers to expand their business in cross-cultural boundaries. Next, it will explain the negative aspects/disadvantages of global consumer culture. In addition to this, the paper will present some examples of business failures caused due to insensitivity of local norms and finally the paper will provide an international marketing strategy which can help marketers to address the global marketing challenges. KEY WORDS: Consumer culture, religious values, globalization, failure, national identity, global phenomenon, global brands & marketing strategy. B. WHAT IS CONSUMER CULTURE? The Association of Qualitative Research has defined consumer culture as: “Consumer culture suggests that consumption - the act of buying goods or services - is a cultural activity, one imbued with meaning and driven not just by practical or economic factors. Mapping and exploring the business implications of these cultural meanings is one of the principal functions of qualitative market research.” By reviewing the above definition we can conclude that cultural values directly influence the consumption patterns of buyers. Therefore, in order to create a global consumer culture it is essential to carry out an in-depth investigation and research of the local traditions, customs, language, heritage, norms, values and ethics of target foreign market in order to maximize the opportunities of success and minimize the risks of failure. In this way, the process of globalization will meet the standards of localization. C. GLOBAL CONSUMER CULTURE: Since late 20th century the world has become a global village. Due to faster means of communication, rapid advancement in technology, easy means of transportation and increased international business transactions; the barriers between cultural and regional boundaries are almost eliminated. Over the years the religious and cultural tolerance among various societies has increased dramatically and people no longer resist living in metropolitan cities where people from different countries, ethnicity, cultures, religions, societies and political backgrounds live together to form one large society which has colors of many sub-cultures. However, on one hand the idea of global village has played an important role to remove the differences among various segments of society and to provide equal opportunities to everyone irrespective of cast, color, creed, sex or background. But on the other hand, the concept of universal culture is very dangerous as it completely ignores the concept of “nationalism” and the religious and cultural values the shapes up the national identity of the people in different countries. Therefore, marketers need to weigh the pros and cons of entering the foreign market and the barriers to their success. D. ADVANTAGES OF GLOBAL CONSUMER CULTURE: According to Scott Gay, (2006) “a global consumer is the product of cultural convergence spearheaded by industrialized nations” because the customer choices are becoming alike due to the phenomenon of global village. Globalization offers many advantages to the manufacturers who have potential to market their products on international scale and give their brands a global presence. However, every product can’t have global impact. For instance; a farmer in Asia can produce wide range of products by full capacity utilization of his lands and resources. He can easily sell the access products to different countries where his products have greater value without modifying his strategy. However a car manufacturer in Asia will have to take into account many external factors like social, economic, political, legal and cultural aspects before launching his products into the international market. On the whole, following are advantages which attract marketers to adopt a global marketing strategy (Lovekar, 2011). 1. Lower Marketing Cost: If a multinational company adopts different marketing strategy for every country, the cost will be much higher than using one single advertising campaign for every country. For instance; Men shaving products are used in all parts of the world. Therefore, one advertising campaign of Gillette in all countries will communicate the same message without conflicting with the traditional values. 2. Global Scope: If a product has international appeal and high acceptance in different parts of the world then the marketing of that product can be done on a global scale. Coca-cola adopts global marketing strategy by designing one advertisement message for all countries in which it assembles people from different ethnic backgrounds and displays their cultural unity. The purpose of choosing this strategy is that they have consumers from different cultures and ethnic backgrounds across the globe. 3. Brand Image Consistency: Global brands need to have consistent brand image so that the customers across the globe perceive those products in the same way. For example; Head & Shoulders is a very popular anti-dandruff shampoo aimed to provide a dandruff solution to its customers irrespective of national or geographic boundaries. 4. Quick & Efficient Use Of Ideas: It is relatively easier to generate an idea and transform it into a strategy that can be implemented on a large scale rather than choosing multiple ideas and implementing them on different portions of the market segments. For example; Nokia divides its market segments according to the continents of the world. The company keeps on introducing new cellular phones with advance features and attractive designs in order to beat its competitors. Unfortunately, the company has to market its each mobile set independently for each market segment which not only increases the marketing cost of the company but it communicates different message to different audience. From the above advantages we can easily say that it is easier to adopt a global marketing strategy on a large scale rather than using a local marketing strategy for small scale of consumers as it is less complicated and easy to manage. E. DISADVANTAGES OF GLOBAL CONSUMER CULTURE: Despite of the many advantages that global consumer culture brings, there are some disadvantages which can’t be ignored. 1. Inconsistency Of Customer Needs: On the whole, people across the globe have same basic needs which include food, water, shelter, clothes, education, income and leisure. But their demands and desires vary depending on the factors affecting their purchasing decision (purchasing power, family background, religion, cultural values, economic & political conditions and norms & traditions of the society). In other words, customer demands in general seems to be alike (e.g. food) but in particular it may vary according to taste (e.g. pizza). Kentucky Fried Chicken (KFC) is an international chain of fast food restaurants. But the company has to take into account consumer’s taste, buying patterns and preferences, income, purchasing power and cultural food items before launching its food products into different countries. The company also introduces new flavors and modifies the taste of existing products according to the taste of the society. 2. Consumer Response Inconsistency: Competition has become more and more intense in the 21st century. Customers today are more informed and educated than before. They have multiple options available due to which their demands are increasing and it has become extremely difficult to produce a product that meets the exact requirements of all the customers. Therefore, it is least practical to produce one product for all segments of society. For e.g. Dell Computer Corporation address this problem by offering customized computers to its customers. Customers visit the company’s website or online store and choose features according to their preferences. In other words, the company has replaced the strategy of mass production with strategy of customized product. 3. Country Specific Brand And Product: State owned companies can’t sell their products in the international market. Their products are developed to meet the needs of the citizens of that particular country on a large scale. Some of the state owned companies are; Air Canada, Australian Broadcasting Corporation, Pakistan State Oil, Telkom Indonesia, Japan Railways Group, South African Airways etc. 4. The Laws Of The Land Have To Be Considered: The legal and political laws of the host country must be fulfilled in order to launch any product in the host country. Not all the products meet the legal requirements of every country. For instance, beer, wine and other alcoholic products are prohibited in Islam. Therefore, production and import of alcoholic products are not allowed in Muslim countries of Middle East. As a result, any company who is producing alcoholic beverages doesn’t get license of production in the Muslim world. 5. Infrastructural Differences: “The concept of the global consumer is heavily fueled by the Western world” (Levitt, 1983). However, this concept completely ignores the differences among the 1st world countries and the third world nations. The political, economic, technological and infrastructural conditions of the Western World are much more advanced than the poor and developing nations of Africa and Asia. For example; high speed cars like Toyota land cruiser are heavily purchased in Dubai due to the purchasing capacity of people, developed infrastructure and status-quo. But people in tribal areas of India can neither afford to purchase such a car nor is the infrastructure of that country is develop to support high speed cars. Perhaps, smart cars are the best option for Indians. Apart from this, there are many other barriers that are responsible for the failure of global consumer culture such as uneven distribution of wealth in different countries, different wage standards and income gap between developed and developing countries. The consumption patterns of eastern and western customers vary significantly. In brief, Western society is consuming society while Eastern society is saving society. Therefore, the big fishes of the Western World need to achieve economies of scale so that it can supply high quality goods at a lower price in the Eastern market. F. GLOBAL CONSUMER CULTURE: A FAILURE: According to Scott Gay, 2006, “the concept of the global consumer spawns from Westernization, and we have still yet to learn that not everyone is, or wants to be, a Westerner.” Global marketers have completely ignored the importance of cultural relativism. “Cultural relativism is the ability to view the beliefs and customs of other peoples within the context of their culture rather than one's own” (China Internet Information Center). What is right or wrong and what is the correct code of conduct for a person depends on the cultural values of that country. However, in most cases Western corporations ignores this concept and force their own ideas and concepts while launching their products in the host countries without monetizing the potential losses in case of failure of the idea/product. Some of the examples are given below: 1. Disneyland Paris: Euro Disney Resort was the biggest recreation and holiday park located in Paris. The park was owned and operated by Euro Disney (Wikipedia 2010). Unfortunately, the project faced severe oppositions by French labor unions during its construction and to make things worse the projected revenues, hotels occupancy and park attendance was much lower than the estimated figures. The root cause of the failure of the project was negligence of European culture, as admitted by Disney (Hartley, 2006). The development of American theme park was criticized heavily. French philosopher Michel Serres noted, "It is not America that is invading us. It is we who adore it, who adopt its fashions and above all, its words" (Wikipedia, 2010). The biggest blunders made by Disney were: They estimated that Fridays and weekend will be the busiest days at park. However, in European culture most of visitors visit parks on Mondays. Disney assumed that Europeans didn’t eat breakfast due to which they have underestimated the number of restaurants. However, 2500 visitors showed up for breakfast. Disney projected that Europeans will stay in park for around four days but the visitors dint even stay for couple of days. As a result, serious miscalculations of projected revenues were made. Wine is the most important element in the French and European culture. It is used more than water and is essentially served during lunch and dinner. But Disney overlooked this norm of the French culture and received criticism for enforcing American culture in the European society. 2. Xbox Game: X-box game received extreme controversy in 2003 as one of its game called “Kakuto Chojin: Back Alley Brutal” contained several verses from the Holy Book of Muslims i.e. Holy Quran (Iler, 2011). However, since Muslim believe that Quran is a literal word of God and therefore, the book shall be handled with utmost respect, therefore it was extremely inappropriate to use Quranic verses in the background of the game. As a result, the game was recalled and Microsoft Game Studios faced severe loss due to their insensitivity towards religious values of Muslims. 3. Wal-Mart – Failure In Germany: Wal-Mart closed its operations in Germany in March 2006 and sold all of its hypermarkets to the German retail giant-Metro. Although the company had purchased leading retail chains like; Wertkauf, Inters par and ADSA (Kottolli, 2006). But the company still couldn’t manage to survive in the host country due to its insensitivity to the German culture. Standard store operations and ERP, smiling and welcoming employees and fully owned distribution network were the reasons for the failure of the company. These factors might have helped the company to expand in US and Canada but in Germany they didn’t help the company to address the needs of the customers. The shops in Germany are closed by 5:00 PM and they are not open on Sundays because unlike American customers Germans don’t like spending a lot of time in shopping. Moreover, Germans don’t like the assistance of store workers while shopping neither they like to purchase premium price products. They prefer to purchase discounted products while Wal-Mart used its US style products display strategy by placing the discounted and cheap products on the upper shelves or lower racks. As a result, German customers got frustrated. The company also had to pay huge storage cost due to overstock of goods specially non-food items while around 75% of the revenues are generated by the sale of food items in Germany. From the above examples it is evident that international business brings enormous opportunities and enormous challenges as well. The company which avoids investing in the initial research cost ends up bearing huge financial losses due to business failures. Therefore marketing managers must carry out market assessment to check out the feasibility of their idea of expansion. In addition to this, the micro-environmental factors (competitors, shareholders, customers, suppliers and intermediaries) and macro-environmental factors (economic, cultural, political, environmental, demographic and technological aspects) of marketing management must be studied (Wong, 2009). Michael Wilczek (2008) has given following four steps of introducing global brands in the local markets in his paper, “advantages and disadvantages of globalization” “Run an in-depth marketing analysis and research of the target foreign market. Apply the rules of globalization. Respond to national differences Develop the international marketing strategy” All of the above steps are interconnected and therefore, ignoring any of them may result in incorrect brand positioning and misrepresentation of brand image. G. INTERNATIONAL MARKETING STRATEGY: In general international marketing requires that the marketing manager should put him/her self in the shoes of the foreign customers and meet the needs, wants and desires of customers by delivering maximum value. In short, just like local marketing, global marketing aims at providing the right product at the right place at the right price. Given below is the roadmap for global brand positioning: 1. Market Assessment: As mentioned earlier, market assessment is very essential in order to check out the feasibility of the product/idea/business plan. First, prepare the list of potential countries where your product can be sold in order to meet the needs of the target audience. Shortlist the potential countries by conducting the financial and economic analysis and check the market size, growth potential and monetary policies. Screen the political and legal environment of those countries. Study their laws & regulations. Don’t choose politically instable nations like Pakistan, Iraq etc Analyze the socio-cultural environment of that country and modify your product accordingly. For e.g. beef in prohibited in Hinduism; so Mc Donald’s excluded beef burger from their menu before entering the Indian market. Finally, see the competitive environment and develop your game plan to beat the competitors. 2. Product Strategy: If the above environmental factors are feasible, then the marketing manager has 2 options for launching the product: Don’t modify the product and/or marketing strategy if your product meets the local standards. For instance; Head & Shoulders is a consumer product that has the same product formula in every host country. Modify the product/strategy according to the local needs. 3. Price Strategy: Conduct the income analysis of the country and realistically calculate the purchasing power of the consumers and the price people can pay for your product. If the selling price exceeds the cost price-after modification expenses of the product then proceed to the next step. 4. Place Strategy: Choose the location that is most convenient to the customers. Manage your distribution channels effectively in order to minimize cost and forecast your sales realistically in order to avoid the additional cost of over/under stock. 5. Promotional Strategy: Choose the most appropriate promotional strategy that fits with your global positioning strategy. PRODUCT PROMOTIONAL MESSAGE Same product and same promotional message Different product and same promotional message Same product and different promotional message Different product and different promotional message H. CONCLUSION: In the nutshell, Globalization brings tremendous advantages and disadvantages for international markers. It is essential not to overlook local consumer culture for developing a global consumer culture. Failure to address the cultural, national, legal, political, religious and social challenges can result in huge monetary and non-monetary losses. International markers need to carryout market assessment and choose the right marketing mix (product, price, place, promotion) before launching their product into the host country. 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