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Consumer behavior is one of the important things for the marketer to understand. Therefore different dimensions of consumer behavior are to be kept in mind. They can be motivation, perception, attribute importance etc. The focal topic I chose for my essay is cultural influence. My product category is automobiles and my product is Honda. The reason for selecting culture as a focal topic for this product is that car purchasing is influenced heavy by cultural aspects. In this era of globalization, going across borders is an important step towards growth. In the case of automobile industry Japan took this first step by introducing its vehicles in the USA. There is a theory in marketing which is known as adaptation. In the case of cars, even though the world is one big huge market, but products have to be molded according to the cultural requirements of different countries. For instance if we take the product I chose i.e. Honda, it moulds its cars according to the national requirements of different countries.
The reason for choosing Honda as product is basically my interest in cars, and since I have pretty good understanding of the strategies Honda uses across different cultures, where is Honda successful, where is it striving for grow and what is the reason behind that. If we talk the attitude of consumers towards Honda, it depends from country to country. For instance Asian people simply love driving a Honda, the feel it gives, style and performance. In contrast to that in European market it is not famous because of its history as a motorcycle company. In my country every single teenager dreams of having a Honda civic. Its major competitor Toyota corolla is not that famous among teenagers. The basic reason behind this is style, looks and advertisements for the car. European people treat it as a female car for working women. Image of Honda varies from culture to culture. However Honda made one mistake in misunderstanding the culture of European market which is discussed later in the essay. Whereas in Asia Honda successfully understands the cultural values and is competing heavily.
Linkage of theory on consumer behavior towards product:
Car is in of the forms of individuals extended self. It reflects your personality and taste. Consumers show their value with the car they have. For instance a person driving a Honda has a sense of sporty style, who loves performance along with features. But gender roles in contrast with culture also affect the image of a certain product. Jong Won Ko, Peter Wirtz, Mike Rhee, and Vincent Chan (2006) have shown that cultural differences along with gender roles in the form of sex type traits greatly influence the image of Honda. In Europe Honda is considered as a women car, whereas in Asia it is a well known car driven by the head of the family i.e. the male members. Honda also satisfies the motivation of consumer by introducing Honda hybrid cars and euro 4 type engines that consume less fuel, give more mileage and are environment friendly because more and more consumers are going towards go green products that are safe for the environment. Now days a new culture is emerging throughout the world which says safe the environment. More and more consumers are becoming a part of this culture by buying a hybrid car and getting a status of green consumer which is referred as psychogenic needs. Consumers perceive Honda on the basis of symbolic and functional attributes that it posses, symbolic can be the style, overall look and functional attributes such as euro 4 engine, better handling etc.
One of the first writers to identify the importance of culture in relation to consumer behavior was James duesenberry (1949, p. 19). He said that, "in every case the kinds of activities in which people engage are culturally determined, nearly all purchases of goods are made, either to provide physical comfort or to implement the activities which make up the life of our culture".
Antonides (1998) and Van Raaij (1998) have shown that Culture is a combination of different attributes such as societal knowledge, values and norms. A value can be considered as an internal feeling or sense of what should be maintained or achieved, for example a lifestyle or better health. Norms on the other hand include behavior, how to behave or how not to behave towards a certain situation. They can be different for different people. It contains behaviors and different objects and those values and norms are reflected by these behaviors and objects. Cultural changes with time, the change is gradual yet is noticeable. Cultural change is an attribute of an external environment that consists of companies and consumers. It is considered as external because alone a company or consumer cannot have an affect the cultural change. From marketers point of view cultural is an important element in the process of data collection. And for the consumers, culture is basically used to make judgments. A personal belief about certain things cannot be termed as culture; there must be a group of people who share these beliefs. A culture accepted by a large group of people is the dominating one; however there can be subcultures of minorities that include different small groups, their beliefs and values.
Culture is a transferable process; there are two main processes that are related to the transference of culture. They are socialization and acculturation. Socialization refers to the transfer of culture from the older generation of people to the younger generation. There are different parties that can take place in this process; they can be parents, schools, different clubs etc. It is important for the younger generation to accept these norms in order to function properly in the society. There can be an opposite process of reverse socialization where younger generation educates their older generation about new technology or new trends. In acculturation people from different cultures move in to a new culture that already exists. This happens when these people live and grow up in a different culture and then move to an entirely different culture. Different cultures come together in one big market. Europe is a perfect example for this where people from all over the world come to study and work (Antonides and Van Raaij, 1998).
Every culture has a value system; these value systems include different elements of a particular culture that a group of people have common within it, as well as the unique values of an individual being part of that culture (Luna & Gupta, 2001). An individual growing up in a particular culture faces different kinds of restrictions and benefits, and thus these greatly affect the buying behavior of an individual (de Mooij, 2010). For instance in some cultures there are traditions that prevent people from trying new experiences, so from a marketing point of view these people would rely more on their traditional values and norms (Manrai, Lascu, Manrai, & Babb, 2001). This means that these people, instead of trying or purchasing new products first learn by observing them. This difference in values of cultures makes it difficult for the marketers to clearly understand cultural dimensions in a multicultural environment. For this reason marketers have used different dimensions of culture such as individualism and collectivism for the research process (Luna & Gupta, 2001).
Individualism and Collectivism in culture:
Hofstede (2001) has divided world into the categories of individualism and collectivism. According to his work Australia, USA, the UK and some other western countries fall into the category of individualism. In relation to that Pakistan, India, Hong Kong, China and some other Asian countries fall into the category of collectivism. He further states that every nation has its own separate culture that is termed as National culture that culturally divided one nation from another. People from different cultures have different wants and needs, so marketers develop marketing strategies according to the attitudes and behaviors of people living in particular culture (Venkatesh, 1995). We found out that for the collectivist society marketing strategies are developed on the basis of symbolism, representing family or group benefits or prestige (de Mooij, 2004). In contrast to that, for the individualistic societies these marketing strategies are designed based on performance and physical appearance of the product or service (Farhangmehr & Shoham, 2006). If we take an example for the collectivist society, consumer who plans to buy a car will consult his peers, family members or his social circle before making a decision and will give importance to their opinion while making his final decision, especially if it is high involvement level purchase (Wong & Ahuvia, 1998). If we use the same example for an individualistic, the consumer will prefer spending more money and time getting information about the car. He might consult to different websites or go directly to the dealer to seek information. If we get more specific, his decision can include consultation or recommendation but the final decision will be based on his own knowledge and research (Green, Decamps, & Paez, 2005).
Hofstede's Cultural Dimensions:
Hofstede (1980) performed a study on cultural dimensions and gave five different dimensions of culture. They are uncertainty avoidance, individualism, power distance, masculinity and long term orientation. Individualism is the opposite of collectivism as discussed early in the literature. Individualist tends to have not so strong relation with other individuals. Long term orientation refers to how much a society gives value to long term standing, they give more importance to education and work, senior people have more authority than young people. Masculinity discusses differentiation between the role of men and women in a society. In masculine cultures men are considered as strong, the main provider and assertive. Japan is an excellent example of masculine culture. Uncertainty avoidance includes cultures who avoid getting into uncertain conditions; they hesitate in trying new stuff. They run on rules and norms and prefer staying on them. Power distance deals with the difference in distribution of power in the society. High power distance societies tend to be fine with the unequal distribution of power.
High context and low context cultures:
Graham et al. (1994), Simintiras and Thomas (1998), has shown that negotiation activities are backed by cultural context. The bargaining activities are greatly affected by values, beliefs and attitudes in a cultural context (Pamell and Kedia 1996). A comparison between high context and low context is very important in order to understand it in full depth. High context cultures are more with informal interactions and non verbal communications (Simintiras and Thomas 1998). It contains the element of relationship building with the regulation of personal and status. Gulbro and Herbig (1996) state that high context cultures are easy going with less amount of problems when signing contracts or time management. Japan, China, Korea and South America are some examples of high context cultures. In contrast, the low end cultures are more into formal communication, that is verbally expressed (Simintiras and Thomas 1998). Therefore in low context cultures the emphasis is on agreements through formal business contracts. North America, Germany and Great Britain are some examples of low context cultures.
On other important element of culture is the 'cultural values'. They are different from culture to culture. Generally these values are passed by family and society from the time of birth. These values greatly affect one's behavior and day to day decision making. Cultural values are very important to marketers while planning their strategy. There are different attributes of these cultural values. First of all these values are learned, for example when a child grows up in a certain society, he observes and learns his culture either by his parents or through socialization. Secondly these values guide one's behavior, standards and norms are established related to the culture and they are to be followed. Thirdly cultural values can be both permanent and dynamic. As the society changes, these values also change along. Change of values has been noticed in the American culture in the last forty years. Economic conditions, war are some reasons for the change in society (Henry Assael, 1995). Different studies have been conducted regarding cultural values and environmental behavior of consumers. Katja Soyez (2012) has shown that culture changes with time and with time consumers are going more towards environment friendly products. They are known as neo greens consumers. But still a vast amount of consumers still lack this change, but slowly with time they will also transfer to this change. He further explains that as consumers are become more aware of natural environment and the relation of human with the eco system.
Cross cultural influences:
There are huge numbers of firms that are global. They not only target their home consumers but go across borders to attract global consumers. It is important for these firms to keep in mind cross cultural difference when making marketing strategies. Some American firms such as, IBM and coca cola do most of their business abroad. These differences can affect marketers in two ways. First Keeping in mind the norms and values of the culture where is the business is being conducted. Second the customs of consumers in that country. If we talk about the European and the American customs, the European customs are much more formal and they require status and titles. American companies are working more and more on these different customs, some large companies take special courses to get them educated about different customs.
Along with the differences in culture, there are also differences in attitudes. Different studies have been conducted for this purpose comparing the attitudes of American, European and British Commonwealth countries. If we talk about children, American and European women consider children as the most important part of their life as compared to the British Commonwealth countries women. Now if a company has to advertise their products in these markets, parental love would be the main theme for the American and European markets. Benefits such as price and durability would be the main focus for the British Commonwealth women (Henry Assael, 1995).
Discussion ïƒ relating product to the literature:
From the literature above it is clear that there are differences in national cultures. And culture plays an important role for a company in developing strategies. That is why automobile industry transforms products according to the local needs. It may be in the form of shape, functionality, quality or attributes. Misunderstanding the cultural norms and values can lead to disaster, at the same time understanding it can take the company up the ladder of success. In the discussion part as my product is Honda and product category is automobile industry, I will relate my product to the above literature that how culture can give benefits and shocks to companies.
Jong Won Ko, Peter Wirtz, Mike Rhee, and Vincent Chan (2006) describe high context and low context cultural differences and cultural values in regard with Honda in Europe. Honda entered into the European market in 1961 basically as motorcycle manufacturing company and started the motor car manufacturing pretty late. Honda failed in Europe due to misunderstanding of major cultural issues in Europe. Honda's image in Europe is not that strong as compared to other competitors such as Toyota, volks wagon, Audi, ford etc. There are basically four major European markets for automobile; they are Germany, Italy, France and the UK.
The major reason behind the downturn of Honda in Europe is mainly culture. What Honda did wrong was taking Europe as a one big market with same cultural attributes. They used the same promotional activities for their cars throughout the Europe which was indeed a disaster. All four of these countries are within Europe but still there are cultural differences among them. As discussed earlier in the literature about the high context and low context culture, this is the main difference in culture of these countries. Using the same advertisements for both type of culture was not a good strategy. High context culture requires an advertisement based on style and looks of the products with less information. Where as in low context cultures the focus is on information along with the in detail attributes of product. If we take the example of Honda jazz car advertisement that was available on the website, there was a lot of information about the car that was same for the whole Europe. It was very effective for the low context country such as Germany but not for the high context countries.
Starting with France, French culture is basically high context which means that they are more towards the image and style of the product rather than the technical details of the product. What Honda did wrong was that they failed to understand the concept of French people. Honda always emphasized on the attributes and facts about the product in their campaigns. That is of no importance to the French market. Moreover French people are biased towards their own home country cars and consider Japanese cars as low quality cars. They consider Honda as a second car for new working women with less cash. These cultural values created a lot of problem for Honda to compete in France
Italy being a high context culture as France also is more into image and style in products. They are patriotic as French people and prefer their home cars such as Fiat. They too consider Honda as a low level car. Moreover Italians are more into diesel engine cars. Since Honda was continuously sending petrol engine cars into Italy without considering the fact that diesel engine is what Italians like. One reason behind diesel cars was the high fuel prices and more mileage given by the diesel engine. Other Japanese car manufacturers such as Toyota and Nissan were successfully competing in Italy because of their reliable diesel engines. Italy is an individualistic society, and Honda showing their advertisements in a collective manner in Italy could not work as expected. They promoted their cars as family sedans, ideal for families and travelling. Whereas Italians considered Honda as a girl car, and only women would buy it.
Talking about Germany which is a low context culture Honda was pretty successful there. The reason behind that was the bulk of information in the advertisements. German people like getting information about a product before making a final decision. One more reason is that German people are risk takers and like to buy new products and welcome products from different countries unlike French and Italian people.
Culture in the UK is also individualistic as France and Italy. But English people take risks. The reason for Honda's success in the UK is due to launch of euro 4 environmental standard diesel engines in Accord model. Honda changed its strategies in England by introducing a separate UK model for civic in 2006 according to the needs and demands of the market.
As discussed in the literature there are cultures that avoid uncertainty. That is the reason why hybrid cars are famous in one part of the world but not other. For example I am from Pakistan, and hybrid technology introduced by Honda there is not successful, the main reason is because it is new to the people. They prefer fuel engines over hybrid because they fear that it won't last long, and maintaining it would require huge cost. Whereas in the UK on an average every one car out ten is hybrid. This again is a culture difference because both the people think differently. Same product is famous in one part of the world and not in the other. Cultural values also affect the perception of people towards a product. If we compare Honda in Asia and in Europe, Asian people value Honda as a high standard car and are affordable by the upper middle class and above. In contrast to that in Europe, it is considered as a second car mainly for newly working women.
As I have mentioned the failure of Honda in Europe due to cultural misunderstanding, now I will show that how Honda is successful in Asian markets by developing their products according to the needs of people. Honda has designed the shape of cars differently for the Asian market. All Four door sedans for families, giving three different types of engines that are below 2000cc. talking about Pakistan as there is luxury tax on cars having a 2.0 liter engine or above, very less people buy cars over this power range. Moreover the attributes of cars are different for Asian markets. Safety is not the main concern there so only one airbag is provided in the steering wheel. Basically they are coming up to the level of expectations and values of people and designing their products accordingly and saving costs. Asian people look for the overall looks of the car rather than safety and quality, Honda designs it cars stylish and give each model a name such as eagle eyes civic or civic reborn. Asian countries such as Pakistan and India have a collective culture therefore people consult each other and ask from previous buyers and rely heavily on their decisions. So if one person is happy having a Honda, with time more and more people would buy because of the recommendation process.
As we have seen how culture can have a deep effect on the strategies of different multinational organizations from the literature and discussion. Culture is a very important dimension for which knowledge has to be gain. According to Ghauri and cateora (2005, pp 79) cultural knowledge can be gained by two ways, one is factual knowledge that is very much observe able for example different meanings for different colors etc. and the second one is interpretive knowledge which means understanding of cultural nuances and traits for example attitudes, meaning of life to people etc. culture is embedded into every part of life, one of the elements of culture known as material culture involves the use of technology and understanding of people towards that technology. Honda takes advantage of that by placing navigation systems in almost all the cars in Europe, because it widely used here. On the other hand very few countries in Asia are provided this feature because it is not in use. One more important thing is that no two national cultures are same; there are differences one way or the other. People within these societies who make these cultures would be different from each other too. So in contrast with consumer behavior, it is very important to understand the differences in culture and react accordingly for each market. The advertisements of Honda in Pakistan show it as a family car, family having a smooth drive while going on a trip because Pakistan has a collective culture. However in UK the focus is more on the attributes and functionality it offers because UK is an individualistic society. Therefore understanding culture in regard to consumer behavior is key element for a firm to be competitive and successful.