Contingency Factors of Marketing-Mix Standardization - Literature review Example

Literature review Culture as a concept is very difficult to define because of the many elements it encompasses (Barbu 2011, p. 105). In a business context, Hofstede’s definition of culture as the ‘collective programming of the mind’ which differentiates the members of one group of people from another (Hofstede 1984, p. 21) can be used. According to Craig and Douglas (2006, p. 322), culture has a significant influence on all facets of human behaviour. Its impact may be slight or remarkable, direct or indirect, ephemeral or enduring. Craig and Douglas (2006, p. 322) also argue that culture is so intertwined with all attributes of human existence that it is often difficult to tell how and to what extent it is manifested. In consumer research, culture is defined as the lens through which an individual or group of individuals view different phenomena (McCracken 1986, cited by Craig & Douglas 2006, p. 322). Based on this definition and Hofstede’s definition which refers to the ‘programming of the mind’, it is apparent that one individual or group of individuals will view a given phenomenon differently. Thus, a product that may be highly valued by one group may be resented by another. A review of literature by Yalcinkaya (2008, p. 203) shows that even with the increasing globalisation, consumers from different cultures have different perceptions, attitudes, values and preferences, and may remain hesitant to acquire foreign products. As such, it has been argued that consumers are not always rational in their buying patterns, and they are unwilling to change their consumption habits in favour of products or services that are increasingly available in the market. Yalcinkaya (2008, p. 203) further points out that since cultural norms and values are strong determinants of people’s behaviours and attitudes, cultural differences remain a significant aspect of global innovation adoption and diffusion studies. Thus, based on a review of various works by different authors, Yalcinkaya (2008, p. 203) reveals that cultural differences have an influence on adoption and diffusion of new products. The differences in cultures across the globe imply that marketers have to deal with varied cultures as they sell their products globally (Meyer & Bernier 2010, p. 2). Hence, they have to find solutions to manage and deal with cultural differences in various countries. Various studies have shown that while one product may do well in one country or region, it may not do well in another country. Onkvisit and Shaw (2008, p. 340) suggest that culture can exert a significant influence on product adoption. In the same book, Onkvisit and Shaw (2008, p. 241) argue that culture exerts a great deal of influence on the adoption of a product in a given locality. They also point out that a product that is suitable in one culture may be absolutely out of place in another culture. The sentiments by Onkvisit and Shaw can be supported by the example presented by the same authors about the world’s first automatic electric rice cooker that was developed and sold by Toshiba Corporation in 1955. This product was highly valued in Japan because for many Japanese, cooking rice is a serious business. However, selling the same product in the United States at a high price could be disastrous because to Americans, cooking rice is a mundane chore and thus they would not care if the new product was helpful (Onkvisit & Shaw 2008, pp. 339-340). Similarly, Asian and Italian preference for fresh vegetables and meat has hampered the acceptance of frozen foods (Onkvisit & Shaw 2008, p. 241). This means that companies that sell food items must change their approach and offer fresh products if they are to penetrate and succeed in markets in Italy and Asia. The examples above also explain why companies venturing in new markets have to adopt strategies such as standardisation and adaptation as explained by Meyer and Bernier (2010, p. 2). Standardisation involves using the same marketing strategy and mix in all international markets in which a company ventures. For example, Coca-Cola sells standardised products the world over (Levitt 1983, cited by Meyer & Bernier 2010, p. 2). Nonetheless, before going for a standardised product approach, the company involved has to study the market to establish the compatibility of products or services with the targeted market segment (Codita 2010, p. 82). In addition, Meffert and Bolz (1998, p. 183 – cited by Codita 2010, p. 83) classified different categories of products with reference to standardisation. According to the categorisation, there are three groups of products/services: (1) culture-free, high-tech products such as computer hardware have the greatest potential for standardisation; (2) high touch, high-interest consumer goods such as soft drinks and alcoholic drinks have medium standardisation; and (3) culture-bound, non-durable consumer goods like food products and confectionary items have the lowest level of standardisation. This explains why local culture highly influences the adoption of products such as alcoholic drinks, food items and so forth. The second approach to introducing new products in different cultures is adaptation. An adapted marketing strategy is a strategy for adjusting the marketing approach and mix elements to suit each target market. Although this strategy involves more costs, it is anticipated to aid in capturing a larger market share (Kotler & Armstrong 2008, cited by Meyer & Bernier 2010, p. 2). Meyer and Bernier (2010, p. 2) present an example about Nokia’s strategy in Asia in which the telecommunication company sells mobile phones with louder ring volumes to suit the crowded and noisy streets in many countries in this region. Along this line, Barbu (2011, p. 105) notes that the culture of a place has a strong influence on product adaptation and specifically in the international market. Further, Barbu (2011, p. 105) asserts that consumer goods require more adaptations as they are impacted by cultural differences and economic aspects of the target market. For instance, one would argue that if the Nokia phones sold in Asia had ordinary ring volumes, they would not be well adopted as they would be deemed to have a very low ring volume in the noisy streets. To adapt their products to the local culture, companies such as Unilever and Procter & Gamble use the same detergent but sell it under different names to be better suit to local pronunciation. Other modifications done on products include changes in packaging, measurement units, presentation of product constituents and features, labelling, usage instructions, and in some cases, logos and brand names (Czinkota & Ronkainen 2007, p. 330). All these product feature changes emphasise the extent to which local culture influences product adoption. Reviewing Hofstede’s cultural dimensions, Singh (2006, cited by Doole & Lowe 2008, p. 91) suggests that some dimensions of culture are significant in determining whether consumers of particular cultures are likely to easily adopt a new service or product or not. According to Doole and Lowe (2008, p. 91), Singh measured the tendency of a culture to innovate and discovered that cultures characterised by small power distance, low uncertainty avoidance and masculinity are more likely to be innovative and accept new product ideas than cultures with a large power distance, high uncertainty avoidance, and high femininity. Along the same line, Onkvisit and Shaw (2008, p. 340) argue that power distance and uncertainty avoidance influence areas such as ICT adoption. Using an example of the United States and countries in the European Union, it is possible relate the points stated by Singh (2006, cited by Doole & Lowe 2008, p. 91) and Onkvisit and Shaw (2008, p. 340) above. According Doh, Clark and Maggitti (2010, p. 698), the United States has a lower power distance index (40) compared to the European Union’s average (45) and a higher individualism index (91) than the EU’s average (61) (see table 1). Based on Singh’s findings, it is possible that people in the United States are more likely to be open to new product ideas than people in the EU region. This is true going by Gupta’s (2004, p. 62) assertion that the US has adopted online technologies more than countries in Europe. Hence, there is more online shopping in the US than in Europe (Gupta 2004, p. 62). At the same time, Babin and Harris (2010, p. 152) suggest that countries with high uncertainty avoidance will be slower to adopt product innovations. This can be deemed to be true when comparing the US and EU countries since the US has a lower uncertainty avoidance index (46) compared to the EU countries’ average (74). See table 1. Table 1: Comparison of four cultural dimensions across some countries Power distance Uncertainty avoidance Individualism (collectivism) Masculinity United States 40 46 91 62 EU (average) 45 74 61 59 China 80 40 20 66 Philippines 94 44 32 64 Malaysia 104 36 26 50 India 77 40 48 56 Czech Republic 57 74 58 57 Hungary 46 82 55 88 Source: Adapted from Doh, Clark and Maggitti (2010, p. 698) Singh (2006, cited by Doole & Lowe 2008, p. 91) also suggests that cultural dimensions are also related to the preferred form of communication. For instance, individualistic cultures are more likely to be influenced by more impersonal channels while collectivist cultures are more likely to be influenced by interpersonal communications. Similarly, consumers from strong uncertainty avoidance, high power distance, and/or feminine cultures are more likely to be persuaded through normative influences (instead of interpersonal communications) to adopt new products (Onkvisit & Shaw 2008, p. 340). A good example here is that of Heineken as described by Singh (2006, cited by Doole & Lowe 2008, p. 91). Heineken tapped into the need for social acceptance to avoid uncertainties in collectivist cultures in its creative campaign in Asia. The company created a perception of popularity by requiring staff in pubs selling Heineken to leave bottles on tables by not emptying full beers into glasses and not collecting empty bottles. This created the impression that the drink was very popular and in turn elicited high adoption of the brand. References Babin, B J & Harris, E G 2010, Consumer behaviour, 2nd ed., Cengage Learning, Stamford. Barbu, M C 2011, ‘Cultural adaptation of products’, Management and Marketing Journal, Vol. 9, No. 1, pp. 105-110, viewed 8 April 2013, Codita, R 2010, Contingency factors of marketing-mix standardization, Springer, New York. Craig C S & Douglas, S P 2006, ‘Beyond national culture: Implications of cultural dynamics for consumer research’, International Marketing Review, Vol. 23, No. 3, pp. 322-342. Czinkota, M R & Ronkainen, I A 2007, International marketing, 8th ed., Cengage Learning, Stamford. Doh, J, Clark, K D & Maggitti, P G 2010, ‘Globalization and corporate partnering’, in Bidgoli, H (ed), The Handbook of technology management: Supply chain management, marketing and advertising, and global management, John Wiley & Sons, New York, pp. 690-700. Doole, I & Lowe, R 2008, International marketing strategy: Analysis, development and implementation, 5th ed., Cengage Learning EMEA, Stamford. Gupta, B 2004, ‘Global issues’, in Bidgoli, H (ed.), The Internet encyclopaedia, volume 2, John Wiley & Sons, New York, pp. 52-64. Hofstede, G 1984, Culture’s consequences, 2nd ed., Sage, London. Meyer, E & Bernier, I 2010, ‘Standardizing or adapting the marketing mix across culture. A case study: Agatha’, Unpublished Thesis in Marketing, Halmstad University, viewed 8 April 2013, Onkvisit, S & Shaw, J 2008, International marketing: Strategy and theory, 5th ed., Routledge, London. Yalcinkaya, G 2008, ‘A culture-based approach to understanding the adoption and diffusion of new products across countries’, International Marketing Review, Vol. 25, No. 2, pp. 202-214. Read More