Does Culture Matter? - A Consumer Behaviour Perspective

The Article written by Saikat Mandal, from IIM Ranchi is the third prize winner of the July 2012 Article Writing Contest.

Couple of week prior to the release of “The Dark Knight Rises” some hard core batman fans from IIM Ranchi were planning to go to Kolkata to watch the original version as in Ranchi it was coming in Hindi version. According to the demand estimation, the only multiplex of Ranchi were planning for only Hindi version because they have done the same thing in recent past just to meet the local culture.

Later after continuous request from IIM Ranchi students, they agreed to release screen the original English version also. The box office result is that the English show was running houseful since the release till date and there was crisis of tickets in first couple of days. However for the Hindi version situation was not so good. From this simple real life fact what I can analyze is that the multiplex was planning according to the local culture. They knew that in Ranchi Hindi version will be better fit rather than English version.

But what they failed to understand that the premiumness of the product will be compromised due to the customization. Culture is obviously very important factor for marketing a product or to understand consumer behaviour. But with the concept of globalization all the companies are trying to establish a unified brand perception across the globe. In this case culture is becoming less important factor for some global brands. Hence the big question comes into mind whether culture is important or not or if it is important then to what extend it is important?

Culture differentiate target value system

The impact of culture on customer’s buying pattern, consumption related attributes and values are so natural that it is taken for granted. People do certain things because they think that it is write to do so. This judgemental system or decision making process comes from our underlying cultural values which ultimately drives our behaviour. More specifically, our environment, religion, ethnic, social groups, national, professionals attributes defines our value system and drive our practices.

These practices and other personality traits lead to cognitive beliefs. These cognitive beliefs and our practices shape our attitude and underlying values helps to shape social norms. These attitude and social norms decide our behavioural intentions which finally drive our behaviour. In other word culture setup some standard and rules to satisfy our personal, physiological and social needs. Behind every purchase decision, there is some target value system associated with it. Culture plays a major role to create the differentiation in the target value system.  (Schiffman, kanuk, & Kumar, 2011)

Marketing implications

Culture changes with time and place and cultural implications are very tough to understand because it is near to impossible to quantify such things. Although Hofstede distinguished five different dimensions of natural culture as power distance (PDI), Individualism/collectivism (IDV), masculinity/femininity (MAS), Uncertainty Avoidance (UAI) and Long term vs Short term Orientation (LTO). (Hofstede & Mooij, 2002)These parameters vary widely across the globe. The first way to understand the customer’s need is to understand their culture first. Now every product have some attributes which comes from the country of origin. But if these attributes fails to generate enough synergy with the target market, there will be certain problem regarding communication mismatch.

So to successfully launch a product or to market a product, marketers should be well educated on the cultural implications of the target market. Also there exists a scope of competitive advantage how well a company can synchronized with the customer need. Acceptance of a certain product is purely dependent on the cultural synergy between product makers and customers. Also there is a scope of customization of certain specific products to attract some niche segment. For example Spiderman was released in Bhojpuri version just to attract a huge customer base from Uttar Pradesh and Bihar. Here are some example how culture play a big role for the success of a product.

• In India, credit card business in not a very profitable business because credit card providers earn a profit when a customer delays the repayment without defaulting. Whereas most of the Indian customers repay their credit card debt within the free repayment period. The very basic cause behind this phenomenon is the Indian culture and value system. Indians are conditions in such a way that they beliefs debt is not good. Hence they prefer to debit card rather than credit card and even if they use it, they repay as soon as possible.

• In 1995 when Tanishq launch its product offerings with magnificent stylish design made of 18 carat gold, it does not succeed because it was perceived as extremely western. What Indian customer wants were classic and traditional gold jewellery made of pure 22 carat gold. They were not ready to experiment with something new in the segment of gold. First time Tanishq failed to understand this traditionalism however they recovered very strongly by providing offer of pure gold and implementation of carat-meter.

• General motors made a blunder by naming their one product as “NOVA” in Latin America because in Spanish, nova means “doesn’t go”. So this offer was perceived wrongly and failed awfully just because of the language factor.

• When McDonald first came to India, they were struggling with their main offering Big Mac because it contains beef and Indians have issue with beef. Later they introduced Maharaja Mac to replace Big Mac to cope the situation with non-beef offering. Same was the situations with KFC. To capture the veg customer segment, they launch veg offerings especially in India.

• Kellogg has entered in Indian market a long time age but still it is struggling to make the market growing. The major cause is strong Indian breakfast culture. But they are very successful in the US market as the culture there is quite different from India. In India breakfast is perceived as a very important meal of the day and they want some “filling” breakfast which corn flakes failed to be perceived. Also Indians does not like cold milk as breakfast and hot milk makes the corn flakes soggy and kills the crispness. Also Kellogg’s products are perceived as very costly product though it is very comparable to the normal breakfast cost. All these factors for failure are mainly because of cultural dissonance and lack of understanding of the culture of the customer.

• Socio-demographic and psychological factors play a very important role in amount of consumption and level of consumerism. For an example the per capita alcohol consumption in India is only 0.75 lt per year in comparison to US (9.44) and Russia (15.76). Hence the market size also differ country wise.

• Culture is the reason why Hindi poster does not work in south India.

• All the cultural events and rituals create enormous opportunities for festival marketing.

Some contrary view points

One of the major aspects of globalization is the convergence of test, media, technology and many other things. This convergence ultimately leads to unified or homogeneous tests or needs. For example cross border music channel like MTV or sport channel like ESPN or TEN SPORT have a global demand not any specific cultural demand. Here are some contrary view points where culture hardly matters.

• High technology involved product does not really much differ their offerings just to satisfy the needs of different culture. Take an example of refrigerator or air conditioner. They will never be different for different culture because it is such a high technology involved product.

• When the offering is a premium product, it will not be different for different culture. For example people buy i-phone or BMW car and the purchase decision is not dependent on culture but rather prestige value. Also if marketers try to customize such premium offerings to attract the entire customer segment, premiumness may be lost and it will rather be a negative effect.

• Low involvement and utilitarian products are also hardly culture driven. Tata will never differentiate their offerings for salt according to various cultures.

• Among the consumer durable products the two most convergent products are automobiles and television sets. They created unified global need for themselves.

Conclusion

The effectiveness of the marketing increases with adapting to cultural values of the target customer. Cultural mismatch may results in drastic bad performance. Another important point is that culture is not usually static in nature and market dynamics changes with the continuous change of culture. So marketers should be well prepared for all the cultural changes. For a foreign brand one solution to adopt the culture of consumers is to customise their product offerings according to local needs. But sometimes lot of customization end up with hampering the premiumness of the product. So company also have to keep this factor in mind. In recommendation, multinational companies should first try to understand the latent demand of the target customer and accordingly design their product offerings. The promotion programme should be culture bound to the target customer’s interest.

This article has been authored by Saikat Mandal from IIM Ranchi.