Effect of Culture in the Formulation of Marketing Strategies of Small and Medium Enterprises


As a student of business administration and having experienced the multicultural cosmopolitan life in London, U.K., marketing strategies of various multinational companies have always intrigued me. These marketing strategies are more challenging for small and medium sized enterprises. Hence I am motivated to research on various marketing strategies focussing on "Culture" to determine how well an organization working under stressful economical conditions can formulate successful marketing strategies.

After careful research and study small and medium sized enterprises can focus their marketing by understanding how culture influences consumer psychology. Consumers are influences by various external factors like demographics, age, geographical location and culture is an outside influence on the consumer. According to Professor Lars Perner of Marshall School of Business "the study of psychology of how the consumer is influenced by his or her environment is important for companies to improve their marketing strategies. (Perner)" By understand culture, we can develop and better streamline marketing strategies/campaings to reach the customers more efficiently and aggresively.


The aim of the research effort is to better understand consumer behaviour which includes research of the buyer's decision making process. It will include understanding the psychology, socio-economic background (from consumers in India) and other factors. There are two distinct influences acting on the consumer during the decision making process namely internal and external influences

Internal Influences: These types of influences are caused by the consumer demographics, personal lifestyles, educational qualifications, financial conditions etc.

External Influences: The outside factors that act on the consumer are referred as external influences. These are caused by culture and sub-culture, geographical location, gender, ethnicity and social class.

As mentioned earlier "Culture" plays an important role in the consumer decision making process and the aim of this research is to better understand and possibly provide some suggestions so that small and medium sized companies can better formulate their marketing strategies.


I hope to present a clear and definite picture on how various enterprises can attain better financial results by focussing and developing marketing strategies which are inclusive of all cultures, sub cultures and consumer social classes.

By explaining consumer behaviour more clearly and making it adaptive to our fast changing economical and financial situation I hope to provide solutions for marketing successfully including possible consumer research methods.

I would like to use the survey mentioned in the methodology section to understand consumer behaviour. Due to my inability to reach out to consumer/survey volunteers in U.K. and/or USA I might restrict my findings to India but I would hopefully be able to support my solutions using use cases of already successful marketing strategies.

Literature Review

Following globalization regional small and medium sized companies in India, USA and the UK are under increased pressure to formulate better marketing strategies. In India dimensions of marketing are fast changing. As literacy rate is increasing there is increased consumer awareness. Therefore industries face new challenges. Retail markets are now flooded with retail chains posing serious threat to traditional businesses. Consumers are now experiencing elevated service level as service sector is adopting market-focussed approach. These fast changing scenario is creating lot of changes are expected to take at a fast pace. In this context, it is important for small and medium sized enterprises for adopt and change rapidly. Changes come at a price and are not easily acceptable. It is my effort to provide struggling firms to follow simple steps to design efficient marketing strategies. Marketing is the key for successful businesses.

My knowledge about different marketing strategies and related topics is based on my review of available research papers and books written by economists and philosophers. My research concludes with books and websites on consumer behaviour. I have also researched and understood the role of culture and subculture based on my finding and hope to bring a new perspective in formulating marketing strategies for small and medium sized enterprises.

Lars E. Perner and is Professor of Clinical Marketing with University of South Carolina, USA. He motivates me with his research available on the web at http://www.consumerpsychologist.com/. In the introduction to Psychology of Marketing he presents some ideas which I have tried to explain further using additional references based on my research which are duly referenced in bibliography section. His work helped me build the foundation of this thesis. Consumer should be the centre and possibly the only point of focus of any marketing campaign. Perner briefly describes the role of culture and subculture. Though it should be understood from a different perspective for Indian enterprises, some of the thoughts can be applied generally. The idea that subcultures in India have distinct identity and can be identified uniquely from their heterogeneous group forms a major challenge for marketers. In the section Formulating Marketing Strategies, I have described in detail how one can ensure to include different major and minor motives that at acting on the consumer during the decision making process to design good and appealing marketing campaigns. I hope that this succinct attempt will motivate and encourage readers to focus their marketing campaigns using suggested methodologies to include various segments as mentioned in the "Consumer Culture and Subculture" section.

Another primary source of my research and motivation is a book written by Matin Khan. It was published in 2006 and presents a perfect picture about Indian consumers and their influences. After reading this book, I have realized that it is very challenging to completely understand Indian consumers at any point. Yet, the complexity is resolved when they are segmented based on factors like geographical location and dialect. There are more factors which are useful in market segmentation and I have listed them under the section "Application of Consumer Behaviour Information" of my thesis. In his book "Consumer Behaviour and Advertising Management," Khan discusses about consumer behaviour and its importance for companies. He writes in detail about its application and market analysis. In the chapter 2 "Psychographic or Lifestyle Segmentation" Khan writes in detail about India's family structure and how marketers can use the family's socio-cultural behaviour in their favour in defining winning marketing strategies. I am an Indian and Matin Khan helps me explore my heritage and culture by carefully exploring the hidden motives that influence my decision making process when I try to purchase any asset for my family. In his chapter "Concept of Culture and Subculture," Khan made an attempt to draw a parallel and to find common characteristics amongst different Indian cultures and subcultures. My research however has helped me conclude that culture and subculture are in changing continuously and their likeliness and differences will vary from time to time. Hence, marketing strategies based on common characteristics in subcultures may not be relevant throughout the tenure of the product. In such scenarios, the strategies have to be evaluated time to time and changed accordingly.

In order to further understand consumer behaviour I have further researched Ray Wright's book called "Consumer Behaviour." Wright writes in detail about "buyer behaviour." Examining the study of consumer behaviour is important to demonstrate the roles of customer and the market economy in designing successful marketing campaigns. Firms should compare, evaluate and analyze to relate consumer behaviour and natural and social sciences. It is necessary to individually research all the factors that influence the consumer's decision making process. India is now a part of the World Trade Organization (WTO) and with Capitalism dominating all the leading economies of the world; it is becoming challenging for Indian firms to adjust to the pricing provided by the Chinese counterparts. However, the idea of "swades" [1] is becoming more and more relevant to India's educated classes. Hence, there is an opportunity to design marketing strategies which exploit this consumer behaviour to increase market share and product line-up. The societal benefits includes adaptation and reengineering of various industrial equipment imported by India for its growing economy as the rules relating to intellectual property are not yet clearly defined and implemented by Indian legislation. Though this might change (I do not condone), it is worth mentioning how Indian companies have adapted and to sudden changes in customer behaviour following liberalisation of Indian economy. Wright also explains about the consumer's central position within the free market system. India is not yet a "product driven market"[2] and therefore marketing campaigns designed for various countries may not be equally appealing to Indian consumers.

After carefully designed marketing strategies are rolled out, it is important to maintain and sustain those efforts. Hence, marketing management small companies will have to look into as well. Robert D. Hisrich is a Garvin Professor of Global Entrepreneurship and writes about the challenges in managing marketing in his book "Marketing." He writes in detail about various methods in marketing research, packaging, pricing scenarios, best practices in advertising and distribution. This secondary source is very essential to enhance my understanding of stages of marketing after strategies are rolled out. In various aptly laid out chapters, Hisrich discusses the small and medium sized industries and external marketing environment affecting them. Effective planning is super important. This book provides supporting information for my thoughts in market segmentation. Unfortunately, this book is published in the USA and does not consider Indian market scenario. Therefore, I have used this book as a secondary reference. My emphasis for market segmentation can is extension of the information provided in "Analyzing Markets and Target Marketing." This book has enhanced my understanding of consumer behaviour from business intelligence perspective. It has expanded the role of marketing by focussing only on the behaviour of the consumer. As a reader I am presented with insightful information that makes me wonder if I should keep track of every consumer motive to design better marketing solutions. Hisrich explains in detail about theoretical models in understanding consumer behaviour. This includes Stimulus-Response Model - Learning Model. It is based on the sequential placement of the research steps like drive, motivation, stimuli, cu[3]e and response to fulfil consumer needs. In the psychoanalytic model we make an attempt to understand the complex consumer motives. Within one segmented market and for each product there exist different groups who buy the product for satisfying different needs. Some buy it for functional requirements and some for symbolic concerns. Maslow's hierarchy of needs theory also explains how the needs of human beings can be categorized into physical, sociological and the self-actualization. Indian consumers are now starting to think more rationally on the lines of western consumers. They make decisions based on rationally perceived self-interests. They have range of products from Indian and foreign manufacturers and given the limited amount of money for attaining satisfaction by attempting to satisfy only limited number of wants from many needs. Indian firms, therefore, should make efforts to maximize these demands as mentioned in the book as "utility maximization."

Having understood the influences on the consumer, it is important to understand the Indian market and how it is different from the economies of the west. The biggest contrast is that companies outside India create a demand rather than responding to it. Unlike the west, Indian manufacturers are very quick to get into the market and exit as rapidly as shown by traders and their traditional trading mentality. Foreign companies should have a strong basis for understanding Indian domestic market. It will ensure they are able to best penetrate it. Indians are more welcoming to new ideas and approaches. The consumers are reasonably receptive and reasonably enthusiastic. More comparisons about western and Indian consumers are explained in detail using case studies in Paul Davies's "New Business in India." In a guide to marketing in India, Davies has insights of an economist and the discourse of a writer. He writes about the Indian feeling about competition from China which is accounting for strange consumer behaviour. Such behaviour is making domestic Indian firms start thinking about hurdles while entering the Indian market. They are too high and very risky. Yet there is a opportunity to explore. Davies poses questions about Indian market to prospective firms in India, "questions to ask yourself (while entering Indian market) are the one of whether you can either complement Indian businesses or offer a competitive position that will enable you to establish your business." Putting this in context of my example of Maruti Suzuki, though Maruti hold the key position since 1984, Hyundai Motors India Limited (HMIL) was successfully able to offer consumers with its Santro model, and has gain prominent market share. As of 2009, HMIL became the second largest automobile manufacturer and largest exporter of automobiles in India[4]. Similarly, scores of life insurance companies are setting up franchises to cater the needs of demanding Indian consumers.

Indian manufacturers need to have some competitive edge over their competitors to capture and expand their market share. It is my effort to provide some guidelines and suggestions so that they can adapt accordingly. For traditional Indian businesses it is important to understand their areas of competitive advantages. India has vast amount of natural resources. According to P.N. Mari Bhatt in "Indian Demographic Scenario 2025," Institute of Economic Growth, New Delhi, there will be more than 882 million people in the age group of 15-64 years. The age of retirement in India is 64 years. So the workforce will near one billion Indians. Therefore I conclude that Indians to have superior skills, specialized knowledge, customer orientation, trade relationships and technical expertise. India's abundant resources are made of extensive coverage, economies of large scales, availability of global financing schemes, and ease of foreign direct investments (FDI). This together with current cost and intellectual property niche gives Indian manufacturers head start and leading ground. In the fifth edition of "Marketing Book," the author Michael Baker makes these subtle rules for start-ups very evident. He includes notes and commentary on increasing focus on channel management, CRM, direct marketing, E-Marketing and communication integration. Indian manufacturers should also understand and develop methods to differentiate their products by providing superior product quality, more functionalities, impeccable after sales service, and wider range as discussed in the section "Indian Consumer Characteristics" of this thesis. Even for Indian manufacturers understanding the environment is the key to success. Constantly changing political scenario takes constant adjustments within the company to accommodate and comply with changing rules. Formal marketing audits should be carried out for market size and potential, customer behaviour, segmentation and supply channels. They should understand competitors and should not assume their behaviour. There could be direct competitors, potential competitors, and their strengths and weaknesses. Side by product comparison helps in new design ideas. They should re-evaluate their own products and market position which will enable to compete aggressively.

One of the biggest mistakes done by firms is their strategies and priorities are constantly changing and setting clear strategic priorities is necessary for continuous growth. Finally with products comes customer orientation. Baker writes "(Companies should) develop customer orientation in all function. Ensure that every function understands that they are there to serve the customer, not their own functional interests." This applies best to all small and medium sized enterprises. They should focus on key indicators for performance and audit those often.

Also in the same context it is implied that study of market needs market research. As a supporting document to my knowledge I have reviewed "Introducing Market Research" written by Paul Baines and Bal Chansarkar of Middlesex University Business School. After reading introduction I am now able to better articulate the marketing research and am able to appreciate the role that marketing research plays. In the chapters ahead, Baines and Chansarkar help me decide what and who should conduct marketing research for small and medium sized enterprises in the Indian market conditions. One common mistake firms in India repeatedly do is not being able to distinguish clearly between marketing research and market research. Market research is the research of the markets. Marketing research deals with analysis of marketing process.

After market and marketing research it is time for strategic planning, which uses all the information collected during research. Strategic planning has five important elements; Product Strategy, Offer Strategy, Media Strategy, Distribution Strategy and Creative Strategies. India has Growing number of internet shoppers who necessitate small businesses to adapt these strategies in their favour. Edward L. Nash's Direct Marketing: Strategy, Planning, Execution is a great reference to understand each of these strategies. In its fourth edition, Nash explains how businesses can use internet and global marketing strategies to capture ground in this competitive marketplace. Internet is the newest form of direct marketing. Relying solely on the media can be catastrophic. Following the principles of strategic direct marketing we can create successful campaigns for any product and in any segment of market in India or any other country of the work. But it is very important to have a strategy clearly defined. Earlier in India there was no co-ordination between product development team and the marketing team. The product development team rarely took information about the end user and the marketing team was responsible for selling it. Today, it is just the reverse. Product development teams are instructed to find products that can be marketed easily. The author takes example of Dell and Apple who allow users to configure the computers they would like to buy. The consumers tell the manufacturers what they want and it is made for them rather than buying preconfigured computers available in the market. This gives them the competitive advantage and greater market share. Something similar needs to happen in India. The author presents small businesses with retailing opportunity using the internet. There are many advantages associated with letting consumers buy products online. The physical store can be smaller but the online store can be vast with products that can be delivered just in time. Unlike traditional businesses where the consumers/end users are restricted, online shopping portals do not have geographical restriction. The online store is open almost all the time. Unlike physical stores, online portals can get a makeover almost instantly appealing to masses. It is very easy to gather consumer information as it is not a hassle when the shopping is being done online. Growing number of companies in India are switching to this model because of high cost of running physical stores.

After speaking to business owners in Hyderabad and Kamareddy cities of Andhra Pradesh, India I have realized that businesses are looking for to a clearly and planned guide to marketing plan which is customized for them. Robert E Stevens, PhD is a Professor of Management and Marketing at University of Louisiana at Monroe. Along with his colleague David Loudan, PhD and Bruce Wrenn have collaborated to compose a Marketing Planning Guide. The book lays out step by step, wizard like actions for marketing planning. It introduces planning's importance in any organization and the formal marketing planning process. It has organizational considerations while marketing planning (organizational purpose, objectives and strategies, a look and current organizations structure, and market responsiveness). It introduces Indian businesses to database marketing planning using Hyundai Motor Company as an example. Types of data that we should keep information on and decision making process are well illustrated. It also has steps one should have in any marketing research project. From the market analysis perspective we have to ensure thorough situational analysis, which has strategic implications of product and market analysis including sales and costs analysis of the product versus its competitor. As mentioned in my analysis, Professor Stevens lays strong emphasis on consumer analysis using market segmentation, lifestyle segmentation and introduces "Market Grid Analysis" to the small and medium enterprises. He also writes in detail about competitive analysis for establishing competitive advantage which is also discussed by Michael Baker. With increasing power to spend, India's market is constantly increasing which gives every company an opportunity to succeed. An opportunity analysis should be carefully conducted identifying potential problems and opportunities. There exist internal and other risk factors that need to be considered. Companies should used data from situation analysis to set clear objectives for marketing. Companies should develop a strategy and also evaluate alternate marketing strategies. They should also evaluate other factors influencing the selected strategy. For manufacturers who offer variety of products, different product related decisions should also be made during marketing mix.

Different product positioning strategies and quality based marketing should be initiated. Service strategy should be implemented and evaluated often. Improving customer service is the key to changing customer's perception about the company. If the existing products need a makeover or change, relevant product line decisions should be taken. Distribution channels should be carefully selected and promotion decisions should be made only on the basis of target audience. Media and promotional media decisions should not be made without proper cause. For companies competing with Chinese manufacturers pricing also plays an important role in changing customer's perspective about the company. Professor Stevens writes about "penetration pricing and skimming pricing" for making pricing decisions for new products.

In designing successful marketing systems, companies should focus on the following four subsystems (departments) within the organization

  1. Organizational System: The super system which binds all other systems together and coordinates the interaction of all other systems.

  2. Marketing Planning System: This department identifies opportunities for marketing and should create consumer oriented plans.

  3. Marketing Control System: This system will monitor and audit performance of marketing plans to ensure marketing objectives are being met.

  4. Marketing Information System: This provides decision making information and data to all other departments of the company.

Richard L. Sandhusen explains the importance of these systems in his book "Marketing" and explains why "organization system harmonizes marketing efforts." It is because the organization system has infrastructure in which marketing analysis, marketing planning, implementation and controls can be efficiently coordinated. These can be customized for small and medium sized industries we have can more one or group of persons performing multiple tasks. These tasks should be divided once the company starts to grow. This books also talks about product design. The main consideration in product design is consumer preference. Companies should design what consumers want. Indian consumers are now expecting world class safety features in the cars they buy. Almost every car manufacturer now offers cars with air bags, and side impact bar. All those who were reluctant to offer have dealt serious loses. The main criterion for product competitiveness and profitability is pricing. Cost of labour and materials should be carefully used in the price of the product. Products should also be designed for compatibility as well. India is a large country with varied geographical and environmental constraints. There are different climates, and different measurements systems which should be considered during product design.

The study of Indian marketing environment can never be adequate due to constantly changing dimensions. There are the forces that marketing managers should use to create and plan organization objectives. For Indian companies, microenvironment [Sandhusen, 2000][6] is the force that affects the ability of the company to serve its customers better than its competitors. The macroenvironment [Sandhusen, 2000][6] influence the microenvironment due to politics, economy, and changing culture and subculture.

Finally, the game changing role is played by considering distribution systems. Unlike USA and UK, roadway and railway infrastructure is not very well maintained. Companies should make use of channel systems. In India, logistics are becoming the biggest deterrent to appealing marketing campaigns. Logistics requires material management and product distribution (packaging, transportation, storage, and inventory management) for bring products to the end users. These functions are interrelated. Indian companies should adopt structuring logistics into material management and product distribution for efficient logistics. If possible separate department should be created with greater communication between them. Sandhusen writes about the importance of logistics in marketing planning, and mentions "marketing planning can be measured by a number of costly concerns: transportation, storage costs, number of (intermediate) channels in logistics, costs, etc."


The primary aim of this research is to emphasize the impact of culture on marketing strategies for small and medium sized enterprises. Unlike large sized companies, small and medium enterprises face increased competition due to inadequate resources including capital, human resources and strategic assets. To better communicate with their target customer group the small and medium sized enterprises use various techniques in exploring existing or newer markets. I would like to limit my focus to the efforts in understanding the cultural impact on those marketing strategies and, to provide better solutions I would like to refer to the following ways of collecting information.

  1. The primary source of my research is books, magazines, historical articles and, other information available in hard copy. All references will be duly mentioned in the bibliography section.

  2. Information available on internet and white papers. While most of the information and statistics available on the web cannot be collaborated with strong facts, it secondary source of information which will act as supporting data for the information I would collect by preliminary research using books, journals and government provided economic data.

Also, I would like to survey the existing marketing campaigns to find similarities and differences between different small sized enterprises. As the emphasis is on culture, I cannot limit my research to UK alone and would like to extend my survey to other countries including USA and India. The research poll will include a short questionnaire which can be an online survey and or a hand written copy. I would like to provide a parallel between the current trends in marketing strategies and the general opinion from the research poll. Though it is possible that there might be a difference in them, it is still valid as this effort is to better understand and streamline marketing. A sample questionnaire is enclosed for reference.

Sample questions from research survey:


What is your age group?

Answer choices:

a. Between 18-24

b. Between 25-34

c. Between 34-44

d. Between 45-54

e. Between 55-54

f. Over 65


What is your gender?

Answer choices:


Answer choices:

a. UK

b. U.S.A

c. India


For respondents in U.K.

Do you feel London is an example of cross cultural metropolitan?

Answer choices:

a. Yes

b. No


If the answer is “yes” to question number 4a.

Have you ever felt any commercial is particularly offensive to your culture/background?

Answer choices:

a. Yes

b. No


If the answer is “no” to question number 4b.

Will you be interested in purchasing a product of Company A if it's marketing commercials portrays your culture/background in a positive way?

Answer choices:

a. Yes

b. No


Have you recently been motivated to buy any product because it's advertisement if inclusive and portrays your culture positively?

Answer choices:

a. Yes

b. No


If the answer is “yes” to the question number 6.

Please mention the company name, product name and category if applicable.

Answer choices:

a. <Company Name>

b. <Product Name>

c. <Category>

1 What is your age group?

    a. Between 18-24

    b. Between 25-34>

    c. Between 34-44

    d. Between 45-54

    e. Between 55-54

    f. Over 65

2. What is your gender?

    a. Male

    b. Female

3. What is your primary country of residence?

    a. UK

    b. U.S.A

    c. India

4.a. For respondents in U.K.

      Do you feel London is an example of cross cultural metropolitan?

    a. Yes

    b. No

4.b. If the answer is “yes” to question number 4a.

      Have you ever felt any commercial is particularly offensive to your culture/background?

    a. Yes

    b. No

5. If the answer is “no” to question number 4b.

   Will you be interested in purchasing a product of Company A if it's marketing commercials portrays your culture/background in a positive way?

    a. Yes

    b. No

6.a. Have you recently been motivated to buy any product because it's advertisement if inclusive and portrays your culture positively?

    a. Yes

    b. No

6.b. If the answer is “yes” to the question number 6.

   Please mention the company name, product name and category if applicable.

    a. <Company Name>

    b. <Product Name>

    c. <Category>

As the survey continues, I would like get information from the participants dynamically using the company information and the product name from question number 6b. Using analytical tools available we can analyze the marketing strategies of the company mentioned in the answer to question 6b with its competitors we can deduce how marketing strategies can be focused on a given cultural group.

Risk factors of using Online/in-person surveys:

The risk of using information collected from the survey mentioned above is insignificant because the survey is to learn consumer pattern and behavior. As with all surveys I am sure the information collected will be irrelevant if the answer to question 4b is no. Yet, it is important to know the demographics of the participant which will help me better understand the reasons for inadequate marketing for the cultural background of the participant.

Overall, I would like to use this survey to better understand strategies used by companies for the products which were bought by the participants.

Analysis and Research

The study of consumer behaviour is important to better understand market place and therefore decide marketing strategies to effectively reach consumers. India as an emerging market and with liberal foreign direct investment policy several companies in the west are finding it a potential for rapid expansion. Hence, it is very important to understand India's culture and the consumer behaviour of Indians.

India is a huge country with over 28 states and over a billion people. There are more than 120 dialects and languages. From the market perspective, the populace comprises of different segments of consumers differentiated by class, income, geographical location and family income. Following the liberalisation of the economy the recent development in India is the evolution of the rural economies for basic goods and amenities. More than three fourths of India's population resides in non-urban settings and shared one third of India's national income. India now is a lucrative market because it is the 12th largest economy of the world and fourth largest by purchasing power parity (PPP) (The Economic Times, 2007).

Consumer Culture and Subculture

It is one of the external influences acting on the consumer during the decision making process. It is the influence imposed on the consumer by groups of individuals. According to Perner culture can be defined as "that complex whole which includes knowledge, belief, arts, morals, custom, and any other capabilities and habits acquired by a person as a member of society" (Perner). Professor Robert Hisrich defines culture as "it is the totality of beliefs, values, and the customs of a group of people that are passed on to succeeding generations." [Hisrich, 2000][113].Culture has distinct characteristics. All the parts of the culture fit together in logical pattern. It is a growing experience. For Indians it is the learning of Indian culture rather than being born with. Culture is ever evolving within the limits of acceptable behaviour. Homosexuality is a taboo in the Indian society but due to pressure from Naz Foundation (India) Trust, National AIDS Control Organization, Law Commission of India, Union Health Ministry, National Human Rights Commission and The Planning Commission of India have successfully lobbied and were able to have Delhi High Court pass a ruling decriminalising homosexuality to be conflicting with the fundamental rights as provided to Indians by the Constitution of India.

It is very important to know that Culture in itself is not stagnant and static. Companies like Coca Cola, Pepsico and major pharmaceutical industries have made their mark in Indian market and have adapted themselves to local market conditions and have been accepted gracefully by Indian consumers. Likewise medium and small scale industries now being set up in India under SEZ (Special Economic Zones) by collaborating with similar sized companies from China have the opportunity to explore and adapt Indian conditions.

Subculture in India

Sub Culture can be defined as group of individuals identified by a unique common culture which makes them different from other individuals in given context of larger culture. The sub culture can have contrasting ideologies to the dominant culture, which can be described as a counter culture. Wikipedia defines it as "systematic opposition to the dominant culture." Within India's culture there are many homogeneous groups and segments. These groups have their own set of customs, and traditions and their behaviour are distinct and particular. In India, Hindus living in different geographical areas show certain patterns of lifestyle, values, and dialects. They also speak distinct languages. They can be further classified as Hindus of North India and Hindus of South India or Hindi speaking Hindus and non Hindi speaking Hindus. Matin Khan in his book "Consumer Behaviour and Advertising" writes "The Hindus of North (India) are homogenous in themselves but heterogeneous when compared to those living in the South (India)." (Khan, 2006).

India's culture and subculture can only be understood by careful analysis of ethnicity. It depends on the person's palce of birth which remains unchangeable. Members of these ethnic groups tend to reside in similar localities. They usually marry within their own group and share a common feeling of peoplehood. Unlike ethnic groups can be divided based on race, nationality and religion. (Khan, 2006).

Subculture in the USA

American culture can also be classified into three subcultures based on race and origin, namely black subculture, Asian American and Hispanic . Formulation of better marketing strategies requires a thorough understanding of the characteristics of these subcultures. Black subculture exhibits signs of disadvantages campared to the whites population with reference to education, and employment. They usually reside in crowded or downscale neighborhoods in large US cities. With aggressive legislations brought about by US congress trying to bring african americans into main stream economy the market for blacks is increasing almost 3 times faster than whites (Khan, 2006). It is interesting to note that the family structure of blacks is different from other American family and is headed by females. They are motivated by styles, fashion and sports. Most of the advertisements catering to blacks shows flashy ornamental jewelry, cars and sports stars. It is important to note that the total annual purchasing power of African Americans is above USD 250 billion as of 2000. Blacks spend more than other subcultures on articles of clothing and entertainment.[ (Sandhusen, 2000)]

Asian Americans now form a fast growing segment of US population and they comprise of Indians, people from pacific islands (Hawaiin), Vietenamese and all other segments. They exhibit different habitat patterns and are scattered all over America. They are educated and assimilate into American culture more rapidly than any other subgroups. They also tend to hold their traditional values and strive to remain with them. They show distinct consumer behaviour and adopt moderate behaviour, parents head the family, and do not show affection openly.They are sole target of marketeers from packaged food industry.

Hispanic culture in the US is dominated by people coming to US from Mexico. Though they reside in the US they have maintained their spanish heritage, culture and dialect. They mostly speak Spanish language and are about 8% of US population. People from Puerto Rico and Cuba are also included in the Hispanic subculture of the US.Their social status is just above African Americans and tend to live in larger US cities like New York, Chicago, Florida, California and Arkansas. They exhibit different consumer behaviour and give importance to education unlike blacks. According to ORCI, a 100% independent minority owned women agency's press release dated March 4, 2010 "Latinos comprise more than 15% of the U.S. population, and are predicted to rise to 50 million in the 2010 Census, an increase of 42% since the last Census in 2000. In the 2000 report, the Hispanic growth rate of 24.3% was more than three times the growth rate of the total U.S. population (6.1%)." [ORCI, 2010][2]. In the same survey conducted by ORCI it is shown that 51% of over 9300 senoir marketers do not have any plans to begin or increase efforts involving Latino populations in the next tweleve months. This is one area of opportunity for small and medium sized enterprises to venture out and start formulating strategies aimed at minority subcultures in the US and increasing their market presence. The formulation of strategies involves understanding of research methods for this subculture and will be discussed in detail in further sections of my work. From a social class perspective sociologist identify the six classes existing in the US society; upper-upper, lower-upper, upper-middle, lower-middle, upper-lower and lower-lower. [Hisrich, 2000][124] There are distinct characteristics exhibited by the members of these social class and putting these in context of subcultural groups we have a clearly defined well segmented market.The other cultural divisions can be made on the basis of nationality, religion, race etc. This will further refine the market segment. As the market segment becomes more and more specific to one consumer group, marketers have more control over the type of marketing strategy to make products more appealing.

Consumer Behaviour

Consumers are at the centre of focus in any marketing campaign. Marketers develop products for consumer needs; promote products writing advertised which motivate consumers. They have to plan competitively making products more appealing than the competitor's brand. Having learnt the Indian society segments and buying culture, consumer behaviour is the starting point for all marketing planning. Consumer behaviour is important for the role it plays in the daily lives of the consumers. With media trying to find new avenues of display consumers are bombarded with information everywhere including TV, magazines, cell phones and internet. This information processed by individuals after being subjected to repeated marketing is useful for understanding their behaviour. The decisions then are influenced by such behaviour. Therefore, consumer behaviour can be understood by closely understanding from micro and societal perspective. In view of small and medium sized enterprises, micro perspective of consumer behaviour is of particular interest to advertising managers, middle managers in product design and development and managers in marketing department. It is the understanding of consumers solely for the purpose of the manufacturing firm. In all other scenarios consumers are influenced by socio-economic conditions existing within their society. Consumer behaviour in management is a recent development in management studies and should be taken up seriously by small and medium sized enterprises who strive to gain some ground in a very competitive global financial situation due to globalization. For small scale manufacturers it is worthwhile to answer the following few questions before designing marketing strategies:

  • What is the perception of the consumers about the company's product?

  • How does the consumer compare it to the competitor's product?

  • What consumer opinion should be accommodated to improve the product? What extra functionality would the product add to the consumers?

If the marketing strategy is already in place, it is very important to understand the overall attitude of the consumers towards the marketing strategy and advertisements. For consumers residing in cultures where the family is headed by single person, it is important to understand the role of such consumer as a decision maker of his family.

Consumer behaviour can be defined as "the study of individuals, groups, or organizations and the processes they use to select, secure, use and dispose of products, services, experiences, or ideas to satisfy needs and the impact that these processes have on the consumer and society." (Perner, 2010). Therefore in the study of consumers, we should try to better understand issues such as how the consumer selects a brand and differentiates it from its alternatives. It should be important to understand how consumers will think and feel. It should be determined whether or not a consumer is influenced by surrounding environment. An attempt should be made to gauge consumer's knowledge and information about the product. Finally, it is imperative to understand how consumer motivation and decision strategies differ with different products. It will help understand the importance the products hold for the consumer. In his website, Perner describes the different issues mentioned above that will help firms and organizations improve their marketing strategy. Consumer behaviour is a complex, dynamic and multi-faceted process. All marketing decisions should be based on the assumptions about consumer behaviour. [Khan, 2006][6]

Consumer behaviour can be categorized for an individual or for groups of individuals. It involves services and ideas as well as tangible products. Society and nation as a whole can be immensely influenced by consumer behaviour. A careful consumer behaviour study can help design excellent marketing campaigns. For example, soon after McDonald's launched its first outlet in India, McDonald Corporation started a marketing campaign across India even though it did not have any outlets outside Mumbai. The campaign was designed and developed in India shows Indian customs and traditions try to assimilate with Indian culture. This is very different from its marketing campaigns in USA or UK. In India McDonald's has carefully adapted acceptable message in the TV commercials using Indian artists. This is one fine example of how a foreign company which is very indifferent in culture of its area of operation can effectively understand the culture and promote itself successfully. During early 1990's UK's Rover started making cars for India. Though they were luxury cars and there was a strong market for it and the cars were decently priced, the Indian automotive arm of Rover UK could not successfully function because the marketing campaign was indifferent towards Indian culture. I have personally not been motivated to buy a car of even such great standards. Understanding Indian culture and consumer behaviour helped McDonald's succeed in entering the challenging retail food chain market in India while Rover with all its capital and human resources could succeed. Analysis of culture and the consumer behaviour will decide whether or not a product will succeed.

The second important use of understanding consumer behaviour is the formulation of rules and regulations or public policy. Starting 2009, all packaged food items like chocolates, beverages and carbonated drinks are required to have calorific content information labels on the products. This is because of growing awareness amongst Indian population about obesity and health which were otherwise unimportant for Indians. With growing number of health cautious consumers the government was forced to adapt and pass legislation which have put many businesses and their products under scrutiny.

Indian Consumer Characteristics

Indian consumers are known for their value orientation of products they buy. Under present economic situation even luxury brands have adapted unique pricing and marketing strategy in order to make their presence felt. Family orientation plays a significant role in their spending. All brands which identify and support family values usually become popular and are accepted easily in the marketplace. Indian consumers also value care, respect, and recognition brought to them with high regards. Advertisements which communicate emotions and feelings positively are successful. India's history also plays an important role shaping their behavior. Therefore it becomes very essential to understand the different segments of India's consumers and their consumer behavior.

The general Indian society can be broadly be categorized into the following types:

  1. Socialites

  2. Conservatives

  3. Working men and women

  4. Consumers from rural areas

Socialites are the people of upper class and prefer to shop in speciality stores and spend on luxury goods and services. They are keen on trying new things and products in the market. They are willing to risk different things and prefer exclusive products. They are brand conscious and don't settle for anything less.

The conservatives are from the middle class of Indian society which is the second largest group next to poor section. This segment is the reflection of actual Indian culture. They are very careful while making any purchases and spend more time saving money for the family. Luxury doesn't appeal to them as much as durability and functionality of any product.

The working men and women section of Indian society has experienced tremendous growth over this decade. Since 2002 many foreign companies have established businesses in India and have catered to this segment of the population. The working men and women today has grown out to dominate any product purchase including luxury items like cars, and diamonds. This working men and women have their own mind in decision making process while making a purchase.

The other category includes India's rich and super rich population. This is a very small percentage compared to the other three mentioned above. They can be compared to family is U.S.A whose annual income is in the range of USD 11,000 to USD 222,000.

According to a more recent survey more than 70% of the 1.2 billion Indians live in rural areas. They form the whopping three quarters of the Indian population. With the rapid expansion of Indian cities, the urban middle class effect is now being felt even in rural areas. The rural market is growing at over 3% per annum and adds more than one million new consumers every year. As a result of higher spending power this group is becoming important to all companies wanting to establish their business in India, thus, this group forms the basis for my research and hypothesis. Over the years as a result of increasing literacy rate in the country exposure to foreign media there is a significant increases in consumer awareness in India. Consumer forums have been set up on par with western countries. Government has legislated rules to protect consumers more and has mechanisms in place to protect their investments. More consumers today selective on the quality of the products/services they are spending. This new found trend has made the Indian consumers seek more reliable sources of shopping which gave birth to numerous retail market chains with corporate background where customer service was more pronounced and visible. Reliance's Retail Outlet and Pantaloon's retail outlets are fine examples of such stores which are making it big in India. As more and more retailers start operation in India, there is an urgent need to understand that consumer behaviour will be different compared to the rest of the world. This is not only because all the segments discussed above. It should be noted that services and products which are different stages in market life cycle also change consumer behaviour. For example cigarettes are in decline in most of the Western countries because of increased consumer health awareness by highly publicised health warnings but are in growth stage in India. The market for washing machines is in maturity in the UK but in is growth in India. Marketing strategies should be different for different cultures depending on stage in the life cycle of the product (Wright, 2006). The consumers are now choosing a place where his/her feedback is more valued. Consumers in India, including those in rural areas now are more knowledgeable about products and beginning to demand service and range of products from trusted manufacturers. As mentioned earlier, Indian consumers are price sensitive and tend to buy products which offer them more value for the price.

Considering the Indian market scenario, study of the following factors helps better understand the Indian consumer.

  1. Geography

  2. Population

  3. Urban-Rural

  4. Gender

  5. Age

  6. Educational Qualifications

  7. Religion

  8. Food habits and fashion

Application of Consumer Behaviour Information

Marketing management required comprehensive consumer behaviour information. It is required for the long term success of any marketing campaign. It answers all the questions relating to consumer's wants and needs, defines target market, helps makes decisions on integrated marketing based on the contentment of the consumers. For small scale enterprises it is required to have information on the consumers, market conditions, knowledge of the competitors and the company itself. Best service can be provided only if consumer needs are carefully understood. In India where the traditional families still dwell in one building (nuclear families) there are some consumer behaviour roles are exhibited by different members of the same family. The roles can be classified as; initiator, influencer, buyer, user.

Initiator: This is any person in the family, who needs services or products (sons/daughters need a computer, grandma needs entertainment etc.)

Influencer: The family members who influence the act and promote the purchase.

Buyer: This is usually the head of the household, i.e. the father who makes the purchase.

User: Members of the family who will use the system.

Firms should include the behaviour of the all the roles above but "buyer" is the most important aspect.

Formulating Marketing Strategies

In formulating marketing strategies, the following factors play important roles in the decision making process of the Indian consumers.

  • Product

  • Price

  • Promotional offers

  • Place

  • Target Market

Earlier in India, the only channels for distribution of goods were direct retailers. But globalization brought wholesalers, agents, and direct selling. Distribution centres play very important role in ensuring the goods reach the consumers. They provide place and provisions for consumers to shop. Someone critical goods and services are required by the government to use channels and/or middlemen. Many companies market directly to the consumer using web due to increased demand for online shopping. According to Nielsen's survey of 2008, India was ranked third biggest e-shopping nation.

Indian consumers are also attracted by promotional offers just like their American counterparts. It changes the consumer attitude and makes the product of the company a better choice. With growing number of consumers, Indians are now demanding world class service. Service adds additional value to the product. Chevrolet India offers three years/300,000 kilometre warranty on its car made for India which is more than what it offers for consumers in the Middle East and USA. Check ups and regularly scheduled maintenance are provided at minimal additional cost. These value added services provide value to the car attracting Indian consumers by reducing his stress related to car maintenance. This increases consumer satisfaction even if the quality of the car is not comparable to the Japanese built cars in India namely Maruti-Suzuki, Toyota and Honda.

Target Market: Market segmentation is required when the market is geographical spread like India and the entire market must be broken down into smaller groups who show signs of similar wants. They are distinct from other heterogeneous groups and can be broken down further based on other factors like demographics. We can divide the market, choose a target market and then master it. [Khan, 2006][13]

Market segments are the sub sets of consumers with common behaviour and we have to select one or more sub-sets as target with a unique marketing scenario. Indian consumers are satisfied when they are offered various products and their choices are more. Therefore market segmentation is beneficial to consumers and manufacturers alike. Unlike segmented market, in a non segmented market the same service/product will be sold in a solo marketing scenario and will satisfy a generic consumer. The marketing strategy then will become ineffective and becomes less appealing.

Consumers in India, as discussed in Indian Consumer Characteristic scenario, come from different backgrounds. Market segmentation becomes essential to identify those segment based on factors mentioned earlier to provide effective marketing of goods and services. From consumer and societal perspective segmentation helps expand the market by creating new avenues for different product categories.

Market segmentation essentially is the application of divide and rule policies. After identifying the market segment the policies in marketing strategies are directed only towards those segments. Therefore, segmentation can be defined as division of potential market into different subsets of consumers who show distinct characteristics and behaviours, which are very different from others in the entire market. Indian consumers are more satisfied when they are offered wide range of product choices. In case of non segmented market one product will be sold to every prospective buyer with only one strategy and therefore the campaign becomes ineffective and less appealing. Because consumers come from different backgrounds, have different educational qualifications it is essential to segment that market for effective marketing. Finally, market segmentation helps in expanding the market by ensuring higher customer satisfaction quotients.

Factors for Segmentation

Many factors can be used as a basis for segmentation as follows:

Segmentation based on geographical location

East, West, North, South


Age, Sex, Family Status, Marital Status, Educational Qualifications

Segmentation based on Socio-culture

Culture and subculture, Religion, Social Class, lifestyle (for Indian market), Race/Ethnicity

Geographical location helps identity possible markets and demographics and social culture helps describe the consumers in that market.

Markets can also be segmented based on lifestyle. It is essentially the study of how people earn money and where and how they spend it. It is determined by analyzing past purchases of the consumers. It establishes a relationship between targeted segment based on lifestyle and the product.

Counter Segmentation in Lifestyle Based Marketing Strategies

When segmented marketing is practiced in different segments, some segments appear to shrink which makes them less appealing for product placement as they do not posses enough net worth to be marketed individually. Such segmented markets should be combined and strategy should be re-evaluated. But lifestyle based marketing should be given prominence when new products are positioned. This forms the basis of selecting the channel of media, and promotional strategies and increases retail sales.

Formulating Strategies Based on Motivation

Consume motivation plays a very important role in the decision making process. It is the inner feeling that promotes the action to make the purchase. A consumer may be motivated to buy the product for his convenience, prestige, and or social status. According to Maslow's Theory of Hierarchy human wants can be classified as primary or secondary. Once a need is fulfilled humans try to fulfil other needs. It is done in a hierarchical way which can be classified further.

Motivation Based Marketing Strategies

Consumers buy products for satisfying their motives. A person buying a car buys for increased mobility and ease of transportation. Marketers should find these motives and design marketing strategies encapsulating those motives. The important motives that marketers and analysts should understand include the motive for buying, and how to formulate strategies which helps consumers fulfil these motives and resolution of conflicts between the motives if applicable.

Information on consumer motives can be collected in different ways. It is easier to ask questions directly to the consumer. However, there may be some motives which are hidden or unclear. These can be termed as "Latent Motives," [5] and these motives are not disclosed. Motivational research should be implemented to understand such motives by asking indirect questions to extract information from consumers. Questionnaires and interviews are helpful in motivational research.

Once adequate motives are known, marketing strategies should be planned to ensure that those motives are being fulfilled for the consumers. During this time it is important to identify target market for the chosen product. Consumers should be informed by advertising and offered promotional offers.

Considering Indian consumer behaviour we can understand the following motives and latent motive influencing his/her decision to buy a Maruti car.

Clearly evident motives

Small car

Economical price

Fuel economy

Family friendly

Modern Technology

Consumer Behaviour

Buying a Maruti car

Latent (hidden) Motives

Can't afford a large car

Can't spend on maintenance

Resolution of Motivational Conflicts

Conflicts are those motives that are acting on the consumer's mind as to which thought should be given important. Motivational conflicts are of three types:

  1. Approach-Approach Motivational Conflict
  2. Approach Avoidance Motivational Conflict

  3. Avoidance-Avoidance Conflict

Approach-Approach Motivation Conflict: These are two equally attractive choices acting on the consumers. These are addressed by timely release of advertisements. In the table above, we can have consumers who don't want large cars and have other cars similar to their choice. In India Fiat Uno and Chevrolet Spark are strong competitors to Maruti 800. This creates a conflict in the consumers' decision making process. In the US, automotive industry these are addressed by allowing "compare functionality" on the website of the car manufacturer. Such tabular presentation of the car specifications helps consumer come to a conclusion based on his choice of car specification.

Approach Avoidance Motivational Conflict: These are two diametrically conflicts acting on the consumer. These positive and negative thoughts prevent the consumer from making the purchase. Consumers should be given a choice to resolve this conflict by offering secondary products. For diabetic patients who like carbonated beverages, offering sugar free drinks can resolve this conflict. For environmental conscious customers Toyota India is now offering Hybrid version of its Prius.

Avoidance-Avoidance Motivational Conflict: It presents the consumers with two undesirable penalties. This can be prevented by allowing the consumers to choose less penal alternatives based on the consumer's convenience.

Reference and Bibliography

Perner, L. (n.d.). Consumer Behaviour: The Psychology of Marketing. Retrieved Match 18, 2010, from http://www.consumerpsychologist.com/

The Economic Times. (2007, April 07). Retrieved March 15, 2010, from www.indiatimes.com: http://economictimes.indiatimes.com/Mr_Rupee_pulls_India_into_1_trillion_GDP_gang/articleshow/1957520.cms

Wright, R. (2006). Consumer Behaviour. In Consumer Behaviour (p. 470). Jennifer Pegg.

Subculture. (2009, 09 03). Retrieved 03 15, 2010, from http://www.wikipedia.org: http://en.wikipedia.org/w/index.php?title=Subculture

Khan, M. (2006). Consumer Behaviour and Advertising Management. New Delhi: New Age Internation (P) Limited.

ORCI. (2010). New Survey Finds American Advertisers Acknowledge Hispanics' Impact on U.S. Culture. Hispanic PR Wire , 2.

Sandhusen, R. L. (2000). Marketing. Barron's Publishing.

Hisrich, R. D. (2000). Marketing. Happauge, New York: Barron's Business Library.

Nash, Edward. (2000). Direct Marketing - Strategy, Planning, Execution (Vol. IV). New York, NY: McGraw-Hill.

Hisrich, R. D. (2000). Marketing. Happauge, New York: Barron's Business Library.

Robert E. Stevens, David Loudon, Bruce Wrenn and Phylis Mansfield. (1997). Marketing Planning Guide (3rd Edition ed.). NY, United States of America: Best Business Books.

[1] Swades is a Hindi word for homeland. Used in context of buying domestically manufactured goods.

[2] Product drive market is where businesses produce products and services without identifying who the customer will be.

[3] Cue is a minor stimulus that the consumer experiences in favor of making the purchase.

[4] Source: http://en.wikipedia.org/wiki/Hyundai_India, http://www.hyundai.co.in

[5] These are hidden motives